The DIC WAY
MissionThrough constant innovation, the DIC Group strives
to create enhanced value and to contribute tosustainable development for its customers and society.

MissionVisionVisionColor & Comfort by Chemistry

SpiritSpiritDrive, Integrity, Dedication, Collaboration, Harmony

Making it Colorful
DIC helps make life colorfulSpecialty Solutions
DIC draws on its expertise andcomprehensive strengths to offer solutions

Innovation through Compounding
DIC brings innovation to society through its
core compounding technologies

Connecting the DIC Group and its Stakeholders

About this Report

DIC Group Communications Tools

In previous years, the DIC Group has published a combined
FRUSRUDWHSUR¿OHDQGVXVWDLQDELOLW\UHSRUWZLWKWKHDLPRISUHVHQWLQJa clear, easy-to-understand picture of the Group and its sustainability
initiatives. Beginning in 2017, the Group has transformed the
DIC Report into an integrated report, which combines financial
information, encompassing consolidated operating results andcorporate strategies, and nonfinancial (sustainability) information.
7KH*URXSKDVSXEOLVKHGDVLPSOL¿HGVXPPDU\YHUVLRQRIWKHUHSRUW(printed), which focuses on key highlights, and a more detailed
complete version (PDF), which contains extensive quantitative data.

The DIC Group uses a variety of tools to promote communication with its many
stakeholders to encourage greater awareness of the Group’s activities. Moredetailed sustainability-related information and data can be found on the DIC
website.

3ULQWHG3')î)RUP3XEOLFDWLRQV

Reports on activities
DIC Report

DIC Report(summary version)(complete version)

DIC Report
Financial Section

DIC Report (Complete version) (PDF-form publication)WEB

http://www.dic-global.com/en/csr/annual/
1RWH7KHGHVLJQDWLRQ³$VLD±3DFL¿FUHJLRQ´DVXVHGLQWKLVUHSRUWUHIHUVWR$VLD(excluding Japan and Greater China) and Oceania.

Link with the DIC Website

DIC REPORT 2017

The ( WEB ) mark indicates that more detailed information and/or
data can be found on the indicated page of the DIC global website.
DIC global website WEB http://www.dic-global.com/en/

Scope of Reporting
Summary integrated
report (published annually)(printed publication)

Complete report(published annually)(PDF-form publication)

Report on results of operations
DQG¿QDQFLDOFRQGLWLRQ
(published annually)(PDF-form publication)

In principle, this report provides information on DIC Corporation and consolidated
DIC Group companies worldwide. For information on the scope of reporting for
ESH-related initiatives, please visit the pertinent page of the DIC website.
WEB http://www.dic-global.com/en/csr/pdf/dic_report_scope_en_2017.pdf

Reporting Period

DIC Global Website

Fiscal year 2016 (January 1–December 31, 2016)

Date of Publication

Real-time information
WEB

June 2017 (The next report is scheduled for publication in June 2018.)

http://www.dic-global.com/en/

Guidelines Referenced

Umbrella website providing information to the global
public about the DIC Group and reports on its various
activities; updated as necessary

Guidelines referenced in the preparation of this report were ISO 26000, theInternational Organization for Standardization’s standard for social responsibility,
released in 2010; Japan’s Responsible Care Code; and the Global Reporting
Initiative (GRI)’s G4 Sustainability Reporting Guidelines.

Contents
3
5
8
9
11
12

The DIC Group: A Global Powerhouse
A Message from the President
TOPIC Steady Progress in Strategic Information)LQDQFLDODQG1RQÀQDQFLDO,QIRUPDWLRQOverview of Materiality Analysis
The DIC Group’s Business Portfolio

21

Printing Inks
Fine Chemicals
Polymers
Compounds
Application Materials

23

Special Feature

13
15
17
19

25
27

28

31

35
36
37
42
43

47
48
49
50

Super Engineering Plastics(QYLURQPHQW)ULHQGO\3RO\XUHWKDQH5HVLQVIRU8VHLQ$UWL¿FLDO
and Synthetic Leathers
IZANO Folding Emergency Helmets

51
53
54
62

Sustainability ReportCompliance
Risk Management
Information Security
Environment, Safety and Health (ESH)
Quality
Human Resources Management
Sustainable Procurement
Business Models that Respond to Social Imperatives
New Technology Development and Value Creation
Harmony with the Community and Social Contributions
Communication with Stakeholders

DIC Group Milestones
7KLUG3DUW\9HULÀFDWLRQ
Financial Report for Fiscal Year 2016
Corporate Data
Cover Design

TOPIC

Helping Improve Food Packaging to Extend Product Shelf Life
29

35

46

Product Development for a Sustainable Society
23

34'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2IÀFHUV
Corporate Governance

DIC Report 20172

The cover of this year’s DIC Report derives its
LQVSLUDWLRQIURPWKH',&*URXS¶V³&RORU &RPIRUW´brand slogan, employing bright colors that evoke theefforts of the Group, a global powerhouse, to enrichand add vibrancy to society and the lives of people
everywhere.

The DIC Group: A Global Powerhouse
Corporate Data
Registered name:
Corporate headquarters:

DIC Building, 7-20,
Nihonbashi 3-chome,
Chuo-ku, Tokyo 103-8233,
Japan
February 15, 1908
March 15, 1937
¥96.6 billion
20,481(Nonconsolidated: 3,313)

Date of foundation:
Date of incorporation:
Paid-in capital:
Number of employees:
Number of subsidiaries
and affiliates:(

174 Domestic: 31
Overseas: 143

Global Network)

Corporate headquarters (Tokyo)

DIC has 174 companies in 63 countries and territories around the world.

53

31

EuropeChina

Europe and Africa

32

Sun Chemical Group and others

Net sales¥167.8 billion

Operating income¥7.8 billion

South &Southeast Asiaa

5

Japan
DIC Corporation, DIC Graphics
Corporation and others

2

Asia and Oceania(Excluding Japan)

Africa¥145.0 billion

Operating income¥14.6 billion

DIC (China) Co., Ltd.
(PRC)

3

¥305.0 billion

Operating income

Oceania

DIC Asia Pacific Pte Ltd(Singapore)

DIC Report 2017

Net sales¥29.6 billion

DIC (China) Co., Ltd., DIC Asia
Pacific Pte Ltd and others

Net sales

Japan

22

Net Sales

Operating Income(Billions of yen)

1,000

60

800

50

0

54.2

51.1

41.1

20

200

40.2

751.4

820.0

830.1

705.6

703.8

30

38.5

40

600
400

(Billions of yen)

Sun Chemical Corporation headquarters (United States)

10’12 ’13 ’14

’15

’16

（FY）

0

’12 ’13’14 ’15 ’16（FY）

Notes: 1. The consolidated results for fiscal year 2013 comprise the accounts for the nine months ended December
31, 2013, of DIC and all but one of its domestic subsidiaries and the 12 months ended December 31, 2013,of its overseas subsidiaries and one domestic subsidiary.
2. Corporate data is as of December 31, 2016. Net sales and operating income are for fiscal year 2016.

Breakdown of Fiscal 2016 Net Sales by Region
Asia and Oceania

19.3%

North
America

14

North, Central andSouth America

17.8%

North, Central andSouth America￥751.4billion

Japan

40.6%

Europe and Africa

Sun Chemical Group and others

22.3%

Net sales¥133.6 billion

Breakdown of Fiscal 2016 Operating Income by Region¥7.3 billion

Asia and Oceania

Operating income

24.6%

Central & SouthAmerica

North, Central andSouth America

15

12.4%

￥54.2
billion

Japan

49.9%

Europe and Africa

13.1%
Note: Operating income as used here includes eliminations (approximately ¥5.1 billion). Accordingly,
these percentages do not represent shares of reported operating income.

Principal Global R&D Sites

Polymer Technical Center—
China

Cincinnati (United States)

Printing Inks
Technical Center—
China
Qingdao DIC
Finechemicals(PRC)

St. Mary Cray Technical Centre (United Kingdom)Carlstadt (United States)

Eurolab(Germany)
Polymer TechnicalCenter—Asia Pacific(Thailand)

Central ResearchLaboratories(Japan)Printing Inks TechnicalCenter—Asia Pacific(Thailand)

DIC Report 20174

DIC/Earthrise Algae
Research Center(United States)

A Message
from the President
Representative Director,
President and CEO
DIC Corporation

Yoshiyuki Nakanishi

Targeting growth over thelong term by providing
products that accurately
address social imperatives
Building Robust Corporate Health and
Growth Drivers
The DIC Group is a leading multinational chemicals organization
comprising 174 companies in 63 countries and territories.
Printing inks account for approximately 30% of consolidated
sales, while organic pigments, the principal raw material
used in printing inks, account for around 20%. We are theworld’s leading manufacturer of polyphenylene sulfide (PPS)
compounds—key engineering plastics—with a global market
share of approximately 27%. We also supply a wide range of
GLVWLQFWLYH¿QHFKHPLFDOVSURGXFWVLQFOXGLQJSRO\PHUVDQGOLTXLG
crystals (LCs) that contribute to the development of society
and our customers. Having formulated a growth scenariothat includes concrete long-term targets for consolidated net
sales and operating income of ¥1,000 billion and ¥100 billion,
UHVSHFWLYHO\LQ¿VFDO\HDUZHDUHFXUUHQWO\LPSOHPHQWLQJ
a variety of measures aimed at powering further growth.
In printing inks and synthetic resins, both businesses withstable earnings bases, we are emphasizing a shift to a way of
conducting business that will facilitate sustainable growth. To this
HQGZHDUHWDNLQJVWHSVWRRSWLPL]HSURGXFWLRQFRQ¿JXUDWLRQVand reduce costs in mature markets, notably North America,
Europe and Japan, on the assumption that appropriate demand
will decline. At the same time, we are emphasizing a shift tosustainable products such as waterborne and ultraviolet (UV)curable resins and accelerating the expansion of our operations

DIC Report 20175

in promising markets, particularly in Asia, with the goal ofreinforcing our already substantial global market presence.
We are concentrating our allocation of management resources
on a global basis in businesses that we expect to drive growth,
notably thin-film transistor (TFT) LCs, functional pigments,
PPS compounds and packaging materials. With demand for
packaging materials rising, we built production facilities for
OLTXLGLQNVIRUIRRGDQGEHYHUDJHSDFNDJLQJLQ,QGRQHVLDDQG
Turkey. We also built a PPS compounds production facility
in the People’s Republic of China (PRC), the automobile
industry’s principal production base. All three of these facilities
commenced operations in fiscal year 2016. In the inkjet inks
business, we are promoting the development of new productsthat will facilitate our entry into promising new areas.
In addition, we are expediting efforts to create next-generation
EXVLQHVVHVWKDWUHVSRQGWRHYROYLQJUHTXLUHPHQWVLQDUHDVVXFKas electronics materials, packaging and healthcare. In light ofincreasing social imperatives pertaining to environmental issues,
DUWL¿FLDOLQWHOOLJHQFH $, DQGWKH,QWHUQHWRI7KLQJV ,R7 DPRQJ
others, we are leveraging our proprietary technologies andingenuity to provide high-value-added products to customers
around the world.
Through these and other efforts, we are working to ascertain
the needs of individual businesses to build a balanced,
diversified business portfolio, thereby ensuring a robust
earnings structure. By remaining abreast of social imperatives
and realizing distinctive growth drivers that stimulate demand,
ZHDUHFRQ¿GHQWWKDWWKLVZLOOHQDEOHXVWRDFKLHYHRXUWDUJHWV
IRU¿VFDO\HDU

Record-High Operating Income andOrdinary Income in Year One of DIC108
In fiscal year 2016, the first year of our current medium-term
management plan, DIC108, we reported consolidated net sales
RIELOOLRQ2SHUDWLQJLQFRPHDPRXQWHGWRELOOLRQZKLOHRUGLQDU\LQFRPHUHDFKHGELOOLRQERWKUHFRUGKLJKVNet income attributable to owners of the parent was ¥34.8
ELOOLRQ5HWXUQRQHTXLW\ 52( ZDV'LYLGHQGV 1 were¥100.00 per share, an increase of ¥20.00, while the payout ratio
was 27.3%.
*1 $GMXVWHGWRUHÀHFWWKHLPSDFWRIDFRQVROLGDWLRQRIVKDUHVLPSOHPHQWHGRQ-XO\
*2 Debt-to-capital ratio (D/C) ratio: Interest-bearing debt / (Interest-bearing debt + Net assets)*3 Solder resist is an insulating materials used to protect circuit patterns on PWBs.

Quantitative Targets

Expanding Efforts andPicking Up the Pace
Fiscal year 2017, the second year of DIC108, is an important
year for us strategically. When we kicked off DIC108, we
GHVFULEHG LW DV DQ H[WHQVLRQ RI LWV SUHGHFHVVRU ',&XQGHUZKLFKZHPDGHSURJUHVVWRZDUGLPSURYLQJRXU¿QDQFLDO
health—evidenced by a debt-to-capital ratio*2 of 47%, exceeding
RXUWDUJHWRI²DQGGHFODUHGRXULQWHQWLRQWRVKLIWJHDUV
that is, to adopt an active stance toward driving growth. To this
HQGZHEXGJHWHGELOOLRQRYHUWKUHH\HDUVWRVWUDWHJLF
LQYHVWPHQWVLQFOXGLQJLQPHUJHUVDQGDFTXLVLWLRQV 0 $V 
In January 2017, we announced that we had entered into a
capital and business alliance with Taiyo Holdings Co., Ltd.,
which is engaged in the manufacture and sale of specialty
inks, investing ¥24.9 billion. Taiyo Holdings is one of the world’s
leading manufacturers of solder resist* 3 for printed wiringboards (PWBs). We supply the company with materials used inthese products, including polymers and pigments. In addition
to expanding sales of existing products, we look forward tocapitalizing on synergies yielded by the alliance to promote theefficient development of next-generation products, including
materials for PWBs. Looking ahead, we will continue to actively
SXUVXH 0 $V WKDW ZLOO IXUWKHU SURSHO JURZWK DQG ZLOO PRYH
appropriately and swiftly on a number of potential deals currently
being explored.
   ,Q WKH DUHD RI 5 ' ZH DUH EUHDNLQJ IUHH RI IRFXV RQ
exclusively independent efforts, making use of venture capitaland other external resources through open innovation toaccelerate the creation of new businesses. In January 2017,
we commenced construction of a new technical building at
the Central Research Laboratories in Japan with the goal of
ensuring the effectiveness of efforts to grow technologies in
VXFKFXWWLQJHGJH¿HOGVDVSULQWHGHOHFWURQLFVThe “Color & Comfort”
Brand Slogan
Healthcare is a crucial area in which we are working to createnext-generation businesses under DIC108 by capitalizing on
RXUIRUHVLJKWDQGWLUHOHVV5 'HIIRUWV6LQFHFRPPHUFLDOL]LQJ
viable technologies for mass managed cultivation of the edible
algae Spirulina in 1977, we have launched a variety of Spirulinaderived health food products and supplements. In recent years,
we launched Linablue ®, a natural blue food coloring. In 2013,
Linablue ® became the first natural blue food coloring to be

2XURSHUDWLQJLQFRPHWDUJHWIRU\HDURQHRI',&ZDVELOOLRQDUHFRUGKLJK2XUWDUJHWIRU\HDUWKUHHLVELOOLRQ
(Billions of yen/%)

Net sales
Operating income
Net income*1
ROE
Ordinary investments
Strategic investments (M&As, etc.)
D/C ratio
Dividend payout ratio

2015
Actual2016
Target2016
Actual2017
Target¥820.0
51.1
37.4
15.0%
34.0
—
47%
21%

¥870.0
54.0
25.0
9.0%

¥751.4
54.2
34.8
12.9%

¥920.0
58.0
30.0
10.0%

*1 Net income attributable to owners of the parent*2 “2017 Forecast” figures are official forecasts published in May 2017.
DIC Report 201762017
Forecast*2¥790.0
58.0
37.5
13.1%
¥120.0¥150.0Around 50%
Around 30%

2018
Target¥960.0
65.0
40.0
12.0%

approved by the U.S. Food and Drug Administration (FDA).
Underscored by a rapid shift in consumer preference fromDUWL¿FLDOWRQDWXUDOIRRGFRORULQJVSDUWLFXODUO\LQ1RUWK$PHULFD
and Europe, Linablue ® continues to attract attention from theperspectives of food safety and security.
Linablue ® and our printing inks and pigments businesses
XQGHUVFRUHRXUDI¿QLW\IRUEXVLQHVVHVLQYROYLQJ³FRORU´:HKDYH
LQWURGXFHGDQHZEUDQGVORJDQ³&RORU &RPIRUW´ZLWKWKHDLP
of boosting recognition of the DIC name and bolstering corporate
YDOXHDQGVLQFH¿VFDO\HDUKDYHLPSOHPHQWHGDQDPELWLRXV
branding program. In October 2016, we introduced a new
television advertisement in Japan that communicates the messageof the DIC brand. We are currently implementing a variety ofimportant branding initiatives in the 63 countries and territories inwhich the DIC Group has operations to bolster awareness of thevalue that we provide to stakeholders and in doing so to help instilla greater sense of solidarity across the Group.

Pursuing Sustainable Management andRealizing Record-Breaking Operating Results
Recognizing that incorporating environmental, social andgovernance (ESG)-related considerations is essential to
our ability to provide products and services that support
communities and industries, we have established key
performance indicators (KPIs) for critical initiatives. Looking

ahead, we will continue working to support our businessfoundation and ensure sustainable growth by promoting efforts
to, among others, help reduce the use of substances that
harm the environment and ensure the effective managementof chemical substances. We will also continue to develop
and launch products with a lower environmental impact that
contribute to the resolution of key social imperatives, including
water-based inks, waterborne resins, LC materials that use lesselectric power and PPS compounds for use as an alternative tometal materials in automobiles.
As a chemicals company, we understand that safety is ourhighest priority. Accordingly, we continue to focus efforts on thecreation of frameworks to mitigate the impact of disasters andprevent the occurrence of occupational accidents and provide
safety training. To reinforce safety in the workplace, we offer
hands-on safety training, which seeks to foster awareness oflatent risks, as a component of training for new employees, bothin Japan and overseas.
We also understand that creating work environments thatempower diverse employees to exercise their individuality andreach their full potential is essential to growth for employees
and for the DIC Group as a whole. As part of our efforts
to promote diversity across the Group, we employ a broad
spectrum of individuals without regard to considerations such as
gender, nationality, physical limitation or age. We also endeavor
to foster a corporate culture that draws on our understanding
and respect for diversity to produce creative ideas, as well as
to incorporate the concept of diversity into management, thus
creating workplaces that enhance job satisfaction.
DIC108 also positions the provision of returns to shareholders
as an important priority. We will continue working to maintaina balance among financial health, investment in growth andshareholder returns and have set a target for dividend payout ratioof 30% over the three years of the plan. To this end, we will shift
our emphasis to income performance–linked dividends based ona fundamental commitment to maintaining stable returns.
Looking ahead, we will continue to diligently implement
the strategies outlined in DIC108 to expand and rationalize
businesses that we expect to drive growth and promoterationalization, as we work to achieve our best performance yetin terms of operating income, ordinary income and net income
attributable to owners of the parent. In these and all our efforts,
we look forward to the ongoing support and guidance of ourmany stakeholders.

Growth attributable tostrategic investments(M&As, etc.)
Next-generation
businesses

Growth Scenario and Positioning of DIC108

Ensure the sustainability of businesses withstable earnings bases• Responses to environmental concerns• Rationalization• Strategic investments (M&As, etc.)
2016

2017

2018

Create business models that Achieve sustainablegrowth by revamping
address social imperatives
business portfolio• Electronics• Packaging• Healthcare• Low carbonization
2019

2020

DIC108

DIC111
DIC Report 2017

7

2021

2022

2023

DIC114

Businesses that will
drive growthBusinesses withstable earnings bases
2024

TOPIC

Steady Progress in Strategic Investments,Q¿VFDO\HDU',&NLFNHGRIIDQHZPHGLXPWHUPPDQDJHPHQWSODQ',&+DYLQJPDGHDFHUWDLQGHJUHHRISURJUHVVLQUHFHQW\HDUVWRZDUG
LPSURYLQJLWV¿QDQFLDOKHDOWKDNH\PDQDJHPHQWFKDOOHQJHWKH&RPSDQ\RQFHDJDLQDGRSWHGDQDFWLYHVWDQFHWRZDUGGULYLQJJURZWKXQGHUWKH
SODQEXGJHWLQJELOOLRQIRUVWUDWHJLFLQYHVWPHQWVLQFOXGLQJLQ0 $VEHWZHHQ¿VFDO\HDUDQG¿VFDO\HDU$FFRUGLQJO\WKH&RPSDQ\
has been on the lookout for investment opportunities that align with its fundamental DIC108 goals, which are to stabilize the earnings of its corebusinesses, expand businesses that will drive growth and create next-generation businesses.

1

DIC enters capital and business alliance with Taiyo Holdings, transforming thelatter into an equity-method subsidiary

2Q-DQXDU\',&DQQRXQFHGDFDSLWDODQGEXVLQHVVDOOLDQFHZLWKTokyo-based Taiyo Holdings Co., Ltd., as a result of which Taiyo Holdings
EHFDPHDQHTXLW\PHWKRGVXEVLGLDU\7RWDOLQYHVWPHQWE\',&DPRXQWHG
to ¥24.9 billion.
Taiyo Holdings is involved in the manufacture and sale of chemical
products for use in PWBs and other electronics components and insemiconductors. Of note, the company commands a top-class share of the
global market for solder resist, which is critical to the production of PWBs.
DIC sees the electronics market as particularly encouraging, primarily
because it offers potential for stable growth into the future and aconsiderable scope for leveraging DIC’s proprietary technologies. In
addition to providing synthetic resins, pigments and LCs, among others, toelectronics manufacturers, DIC is actively promoting the development ofmaterials for printed electronics, thermal materials and other high-value0,' DUWLVW¶VUHQGHULQJ 0,'VGRQRWUHTXLUHVXEVWUDWHVRUKDUQHVVHVDQGFDQ
thus be made smaller, lighter and thinner than conventional PWBs. The market
added offerings that capitalize on its core technologies.
for these components is expected to expand in the future.
In addition to bolstering sales, the agreement brings together DIC’s materials development capabilities, which draw on core technologies
FXOWLYDWHGRYHUPDQ\\HDUVDQG7DL\R+ROGLQJV¶¿UPXQGHUVWDQGLQJRIPDUNHWQHHGV²XQGHUSLQQHGE\LWVH[WHQVLYHVXSSO\FKDLQHQFRPSDVVLQJHYHU\WKLQJIURPVROGHUUHVLVWWR3:%V²DQGPDUNHWLQJSURZHVVWRSURPRWHWKHVZLIWDQGHI¿FLHQWGHYHORSPHQWRISURGXFWVIRUQHZ3:%VLQFOXGLQJPROGHGLQWHUFRQQHFWGHYLFHV 0,'V DQGRWKHUQH[WJHQHUDWLRQPDWHULDOV7KHWZRFRPSDQLHVZLOOFRQWLQXHZRUNLQJWRPD[LPL]HV\QHUJLHVZLWKWKHDLPRIGULYLQJJOREDOEXVLQHVVJURZWKDQGH[SDQGLQJSUR¿WV

2

Sun Chemical and Alliance Holding Company form joint venture that is the largest
printing inks manufacturer on the Arabian Peninsula

2Q0DUFK6XQ&KHPLFDO&RUSRUDWLRQFRQFOXGHGDQDJUHHPHQW
with Alliance Holding Company Ltd to form a joint venture combining Sun
Chemical’s operations on the Arabian Peninsula with the operations ofAlliance subsidiary Ink Products Company, Ltd., a leader in the region’s
printing inks market based in Riyadh, Saudi Arabia. Sun Chemical’s stake
LQWKHQHZFRPSDQ\LV
Recent years have seen a tapering of demand for publishing inks, owing
to the move toward digital media. Accordingly, the focus of the global
printing inks market has shifted to packaging inks, which are expected
to continue seeing growth in advanced economies. Packaging inks
account for more than 70% of printing inks sold on the Arabian Peninsula,where the annual market for such inks is projected to continue growing
DWEHWZHHQDQGIRUWKHIRUHVHHDEOHIXWXUH6XQ&KHPLFDOWKXV
6XQ&KHPLFDO¶VKHDGTXDUWHUVLQWKH8QLWHG6WDWHV
recognizes the region as important from a strategic perspective.
The establishment of a joint venture brings together Ink Products’marketing capabilities, which reflect its familiarity with the market, and Sun Chemical’s products and technologies. Sun Chemical and Ink
3URGXFWVZLOOPRYHZLWKVSHHGWRPD[LPL]HUHVXOWLQJV\QHUJLHVWRSURYLGHWRSTXDOLW\SURGXFWVDQGVXSHULRUVHUYLFHVZLWKWKHDLPRIGULYLQJ
further growth. Sun Chemical and Ink Products boast a combined regional market share of roughly 30%. By leveraging the two companies’
VWUHQJWKVWKHQHZMRLQWYHQWXUHZLOOVWULYHWROLIWWKLVDERYHE\¿VFDO\HDU

DIC Report 20178

Financial Information

Note: 7KHFRQVROLGDWHGUHVXOWVIRU¿VFDO\HDUFRPSULVHWKHDFFRXQWVIRUWKHQLQHPRQWKVHQGHG
'HFHPEHURI',&DQGDOOEXWRQHRILWVGRPHVWLFFRQVROLGDWHGVXEVLGLDULHVDQGWKHPRQWKVHQGHG'HFHPEHURILWVRYHUVHDVVXEVLGLDULHVDQGRQHGRPHVWLFVXEVLGLDU\Net Sales, Operating Income and Operating Margin
Net sales

Operating income

Cash Provided by Operating Activities and Free Cash Flow
Cash provided by operating activities
Free cash flow

Operating margin (%)

Net sales(Billions of yen)

900

830.1

Operating income(Billions of yen)

820.0

800

751.4
703.8

705.6

700

7.2%
6.2%

5.5%

600

(Billions of yen)

70

80

5.7%
4.9%

62.5

70

60

60

50

500

50

400

40

300

30

46.4
41.4

40

33.9
29.1

30

30.3
24.0

20

200

40.2

38.5

51.1

41.1

20

54.2

10

100
0

2012

2013

2014

2015

0

2016 (FY)

19.1

19.0

17.7
10
0
2012

Net Income Attributable to Owners of the Parent and ROE

2013

2014

2015

2016 (FY)

Capital Expenditure

Net income attributable to owners of the parent
Return on equity (ROE)(Billions of yen)

40
(Billions of yen)

36.3

50

34.0
32.1
29.4

30

40

27.6
（%）
30

30

20

16.0

20

20

16.1

14.6
11.3

12.9

10

10
10

0

19.1

26.8

25.2

37.4

34.8

2012

2013

2014

2015

2016 (FY)02012

Net Assets, Interest-Bearing Debt and Debt-to-Capital Ratio*
Interest-bearing debt

Net assets

0
2013

2014

2015

2016 (FY)

Returns to Shareholders* (Dividends per Share and Payout Ratio)
Interim dividend

Debt-to-capital ratio (%)

Payout ratio (%)

Year-end dividend(Billions of yen)

400

25

22.4

299.1

66.3

274.2

241.3

47.2

44.0

218.9

276.7

289.9

307.0

20.5
15

40

(Yen)

100

100

30

160.7

20

20.5

50

49.8

200

60

259.5

57.7

100

27.3

（%）
70

315.6
300

（%）
30

28.8

50

60

60

60

153
30

268
30

252
30

40
374

30

30

30

40

2012

2013

2014

10
0

2012

2013

2014

2015

2016 (FY)

10

80

20

0

0

2015

60
5

40
2016 (FY))LJXUHVKDYHEHHQDGMXVWHGWRUHÀHFWWKHLPSDFWRIWKHFRQVROLGDWLRQRIVKDUHV ,Q¿VFDO\HDU',&SXUFKDVHGDQGUHWLUHGWUHDVXU\VKDUHV

* Debt-to-capital ratio: Interest-bearing debt / (Interest-bearing debt + Net assets)

DIC Report 2017

90

1RQ¿QDQFLDO,QIRUPDWLRQ

Global CO2 Emissions and CO2 Emissions per
Unit of Production (DIC Group)
CO 2 emissions

Global Energy Consumption and Energy Consumption per
Unit of Production (DIC Group)

CO 2 emissions per unit of production(Metric tonnes)

Energy consumption(Liters/metric tonne)

400

200

1,000,000

345

900,000
800,000

346

338

338

723,000

700,000

659,000

154(Kiloliters)

300

657,000

Energy consumption per unit of production

Kg CO 2 /metric tonne

148

150

150

288,000

286,000

150

500,000

659,000

600,000

400,000
200

500,000

100

322,000
300,000

400,000
300,000

294,000

200,000

100

50

200,000
100,000
100,000
0

2013

2014

2015

2016

0

(FY)

0

2013

%DVH\HDU)LVFDO\HDU

20142016 (FY)20150

%DVH\HDU)LVFDO\HDU

Environment-Friendly Products as a Percentage of Overall
Product Portfolio (DIC Corporation and DIC Graphics Corporation)

Occupational Accident Frequency Rate (DIC Corporation)(Rate)

（%）

1.50

100

DIC

Subsidiaries in Japan

2014

2015

90
1.00

80
70

57%

60

0.50

57%

50

56%
52%

53%

0.00
2010

40

2011

2012

2013

2016 (FY)

Note: The frequency rate expresses the frequency of accidents resulting in lost workdays in a fiscal year,
calculated as the number of deaths or injuries per million work hours.

30
20Frequency rate ＝

10
0

2012

2013

2014

× 1,000,000

Total work hours

A frequency rate of 1.0 means one occupational accident resulting in workdays lost in one year
at a site with 500 employees.

2016 (FY)2015

Number of deaths or injuries due to occupational accidents

1RWH2ZLQJWRWKHLQWURGXFWLRQRIDQHZ6$3HQWHUSULVHUHVRXUFHSODQQLQJ (53 V\VWHPLQWKHPHWKRGXVHGWRFDOFXODWHHQYLURQPHQWIULHQGO\SURGXFWVKDVFKDQJHG

Female Employees in Management Positions (DIC Corporation)

Average Years of Employment (DIC Corporation)(Number of people)（%）

5

Male employees(Years)Average years of employment in fiscal year 2016
Male employees:

40

Female employees
417.8 years Female employees: 18.5 years Overall:18.2 years

28

30

25

24

3

20

19

15

2

3.1%

20

20

2.6%

16
2.2%
2.0%
1.7%

10

10

1

5
0

0

1994

2009 2010 2011 2012 2013 2014 2015 2016 (FY)DIC Report 2017

10

2012

2013

2014

2015

2016 (FY)0Overview of Materiality Analysis
The DIC Group has abstracted and analyzed material issues, that is, issues with the potential to affect its performance, and has
LGHQWL¿HGWKRVHRISDUWLFXODUVLJQL¿FDQFHDQGLVWDNLQJVWHSVWRHIIHFWLYHO\DQGHI¿FLHQWO\DGGUHVVWKHVHLVVXHV*XLGHGE\LWV',&
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1. Materiality Analysis Process1

Abstraction of Issues',&DEVWUDFWHGLVVXHVRISDUWLFXODUVLJQL¿FDQFHWRWKH*URXSEDVHGRQWKH*OREDO5HSRUWLQJ,QLWLDWLYH *5, ¶V*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHVLWVRZQVXVWDLQDELOLW\WKHPHVDQGLVVXHVGHOLQHDWHGLQ',&RU7KH',&:$<RUDGGHGE\6XVWDLQDELOLW\&RPPLWWHHPHPEHUV7KH*URXSKDVGLYLGHGWKHVHLVVXHVLQWRWKUHHJURXSLQJV(QYLURQPHQWDO ( VRFLDO 6 DQGJRYHUQDQFH LQFOXGLQJHFRQRPLFLVVXHV  * ZKLFKLWKDVFRPELQHGLQWRJHQHUDOPDWHULDOLW\LVVXHV
2Materiality Analysis

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VHQLRUPDQDJHPHQWIURP',&*URXSEXVLQHVVXQLWVLQWKH8QLWHG6WDWHV$VLDDQGHOVHZKHUHDVVHVVHGDEVWUDFWHGLVVXHVIURPWKHWZLQSHUVSHFWLYHV
RILPSRUWDQFHWR',&*URXSEXVLQHVVHVDQGLPSRUWDQFHWRVWDNHKROGHUV%DVHGRQWKHUHVXOWVRIWKLVSURFHVVDQGKDYLQJFRPSUHKHQVLYHO\UHYLHZHG
LVVXHVLGHQWL¿HGE\H[WHUQDODVVHVVPHQWRUJDQL]DWLRQVWKH&RPSDQ\GHWHUPLQHGPDWHULDOLW\WRWKH',&*URXS
(a) Material importance to DIC Group businesses
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and EXVLQHVVRSSRUWXQLWLHV(b) Material importance to stakeholders
L  7KH',&*URXSUHFRJQL]HVILYHNH\VWDNHKROGHUJURXSV FXVWRPHUVVXSSOLHUVORFDOFRPPXQLWLHVDQGVRFLHW\HPSOR\HHVDQGLQYHVWRUV $VVHVVPHQWVORRNHGDWOHYHORILQWHUHVWRQWKHSDUWRIVWDNHKROGHUVDQGSRWHQWLDOLPSDFW
LL 7RUHLQIRUFHWKHUROHRIREMHFWLYHH[WHUQDOFULWHULDPDWHULDOLW\LVVXHVLGHQWL¿HGE\WKH',&*URXSZHUHDQDO\]HGE\NH\LQGHSHQGHQW(6*LQYHVWPHQWDVVHVVPHQWSURJUDPVRUJDQL]DWLRQVQDPHO\WKH'RZ-RQHV6XVWDLQDELOLW\,QGLFHV '-6, )76(0&6,WKH6XVWDLQDELOLW\$FFRXQWLQJ6WDQGDUGV%RDUG 6$6% RIWKH8QLWHG6WDWHVDQG6XVWDLQDO\WLFV

2. The DIC Group’s Materiality Matrix
The DIC Group’s Materiality Matrix
Very highClassification: ●Environmental (E) ■Social (S)◆Governance (including economic issues) (G)● Contribution to the realizationof a low-carbon society (P23, P40)
● Promotion of products and services that
contribute to environmental protection(P25, P48)
■ Promotion of occupational healthand safety (P37)◆ Innovation through compounding( P117, complete version)

Importance to stakeholders' , &  K D V  R U J D Q L ] H G  W K H  L V V X H VDEVWUDFWHG DQG DVVHVVHG WKURXJK
WKH SURFHVV RXWOLQHG DERYH LQWR LWVRZQ  JHQHUDO PDWHULDOLW\ LVVXHVThe materiality of each of theseissues was scored and a materiality
PDWUL[FUHDWHGE\SORWWLQJWKHVFRUHVX V L Q J  W Z R  V F D O H V  U H S U H V H QW L Q Jimportance to DIC Group businesses
DQG LPSRUWDQFH WR VWDNHKROGHUV,QIRUPDWLRQ RQ WKH SURJUHVV RI WKH*URXS¶VPDWHULDOLW\UHODWHGLQLWLDWLYHV
LQ ILVFDO \HDU  FDQ EH IRXQG
at the end of each section of the
6XVWDLQDELOLW\ 5HSRUW FRPSRQHQW
of both the complete and summary
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■ Respect for human rights■ Promotion of diversity■ Harmony with and contribution

to society■ Enhancement of brand strength/

reputation (evaluation)■ Contribution to colorful and comfortable
lifestyles◆ Provision of solutions◆ Promotion of open innovation● Practical application of measures

to reduce environmental impact (P38)◆ Response to economic globalization/

efforts to reinforce governance(P31, P36)
◆ Promotion of supply chain
management (P42, P46)
◆ Creation of next-generation
businesses (P47, P48)
■ Ability to foster and strengthen

global human resources (P43)◆ Improvement of quality management

capabilities (P42)◆ Efforts to reinforce marketing (P47)◆ Efforts to strengthen global technology

development capabilities (P48)■ Efforts to address needs◆ Response to the growth of digitalengendered by an aging
society and falling birthrates◆ Efforts to increase productivity

businesses

High
High

Very highImportance to DIC Group businesses
DIC Report 201711

Ensuring Sustainable Growth

The DIC Group’s Business Portfolio
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Printing InksThe DIC Group’s Business Segments
and Target Markets

Net sales …………

Printing Inks

¥365.2 billion¥18.4 billion

Operating income …

Page 13

Fine Chemicals

Target markets

Net sales …………

Fine Chemicals¥128.2 billion¥14.4 billion

Operating income …

Electronics

Automobiles
Packaging

Page 15

EnergyDigitalprinting
printing

Livinggennvironmen
nts
environments

Infrastructureebuilding
Coatings
gPolymers

Printing Inks

Application
Materials

Business segments
Fine
Chemicals

Polymers

Net sales …………

Polymers¥180.9 billion¥19.6 billion

Operating income …

Compounds

Page 17

Compounds

Compounds¥61.1 billion¥5.0 billion

Net sales ………………

Operating income … …

Page 19
Dispersion

Polymer design

Organic
molecular design
n

Bas
Ba
Basic
asic technologies
as
tec
te
echnologchnhnologhnonnooloo ogies
ogi
giees
es

Applicability
assessment(Coatin(Co(Coating/printing/molding)Application Materials

光学and・色彩color
Optics

Net sales ………………

Application Materials¥55.7 billion¥1.9 billion

Operating income ……

Page 21

Breakdown of Fiscal Year 2016 Net Sales by Segment

Breakdown of Fiscal Year 2016 Operating Income by Segment$SSOLFDWLRQ0DWHULDOV$SSOLFDWLRQ0DWHULDOV

7.0%

3ULQWLQJ,QNV

46.2%

Compounds

7.7%
3RO\PHUV

22.9%¥751.4billionCompounds

8.4%)LQH&KHPLFDOV

16.2%

3ULQWLQJ,QNV

3.2%

31.0%

¥54.2

3RO\PHUV

33.1%
DIC Report 201712billion)LQH&KHPLFDOV

24.3%

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as “others,” which are not attributable to
UHSRUWDEOHVHJPHQWVWKHVH¿JXUHVGLIIHU
IURP UHSRUWHG QHW VDOHV DQG RSHUDWLQJLQFRPHPrinting Inks

A Stable Business
Since the Start
President, Printing Inks Segment Hideo Ishii

This segment focuses on printing
inks, DIC’s mainstay businesssince its establishment. A global
market leader, DIC boasts anextensive product portfolio ranging
from publishing inks to inks andadhesives for packaging, enabling
it to respond to the needs ofcustomers worldwide.

Key
Products

Printing Inks Product Division
2IIVHWLQNVJUDYXUHLQNVÀH[RLQNVFDQFRDWLQJVQHZVLQNVSDFNDJLQJDGKHVLYHVSULQWLQJVXSSOLHV

Outstanding color
reproduction and reduced
energy consumption

Ensuring safety for food andthe environment
FINART series(Gravure inks for food packaging)

DAICURE HR series(High-sensitivity UV-curable offset inks)

FINART gravure inks combine superb image
quality and suitability for high-speed printing.
They also respond to demand for the reductionof solvents in food packaging and for compliancewith safety regulations in different markets, thereby
contributing to food safety and the environment.

As well as suitability for use with low-power
UV printers, DIC’s innovative DAICURE
HR high-sensitivity UV-curable offset inks
deliver outstanding color reproduction.

Segment Operating Results
Net Sales(Billions of yen)

FY2015

412.6

70.5

For more information, please see Segment Results on page 54.

FY2016FY2017 (Forecast)

Operating Income
and Operating
Margin

365.2

379.3

(Billions of yen / %)

68.5

61.6

FY2015FY2016

19.0

18.4

5.3
273.1

80.8

79.8

78.4

(8.9)
The Americas
and Europe

(8.7)

Japan

Asia and
Oceania

5.2％

5.0％

95
10.5

(11.8)

19.6
5.5

4.8
4.6％

241.2

232.7

FY2017 (Forecast)

3.1

EliminationsJapan

DIC Report 2017

13

8.4

9.5

5.1

4.6

The Americas
and Europe

Asia and
Oceania

Operating margin

Business Strategies Under DIC108
Rationalize operations in mature markets and shift focus
to packaging inks

Expand operations by focusing on promising markets
and products

Recent years have seen a tapering of demand for publishing inks, news inks
and other inks for paper-based print media, particularly in mature markets
such as Japan, North America and Europe, owing to the burgeoning
popularity of digital media. Since its previous medium-term management
plan, which ran from fiscal year 2013 through fiscal year 2015, the DIC
Group has sought to strengthen the printing inks business by advancing
three core strategies, which are to further rationalize operations in mature
markets, to augment operations in promising emerging economies andto shift its business’ focus to packaging inks, for which demand is risingworldwide. Under DIC108, the Group is taking decisive steps to reinforce its
presence in emerging economies, keeping a close eye on demand trends.
At the same time, the Group is working to optimize its regional production
configurations and elevate sales of segment products, particularly
environment-friendly inks, functional coatings and adhesives.

The DIC Group is reinforcing its production capabilities, placing
an emphasis on the Middle East, South America and key Asianmarkets such as the Philippines and Vietnam. In both emerging
and developed economies, the Group is focusing its allocation of
resources on environment-friendly products for food packaging
applications, including packaging inks, functional coatings andadhesives. Through these efforts, together with those in related
businesses such as films, the Group will continue striving toprovide total packaging materials solutions that respond to theneeds of both consumers and brand owners.

Progress of Major Initiatives in Fiscal Year 2016
DIC continued to invest in the integration and rationalizationof its production facilities in mature markets, including Japan,
North America, Europe and Oceania, and to accelerate theshift of its focus toward packaging inks. Efforts to augment
operations in promising emerging economies included thestart up of a new mother plant in Turkey and the completionof a new production facility in Indonesia. Efforts to reinforce
packaging inks operations emphasized product development.
During the period, the Company developed, launched andtook active steps to elevate sales of, among others, a waterbased flexo ink that delivers a print quality comparable
to that of gravure inks and accommodates increasingly
stringent regulations governing volatile organic chemical(VOC) emissions in Asia, notably in the PRC and India, as
well as a new solvent-free low-temperature curing adhesive
and a water-based functional coating, among others. In theareas of solvent-based inks and adhesives, the Group also
promoted sales of new high-solid products with a reduced

environmental impact. The period also saw the adoption by
manufacturers in Japan and overseas of a new gas-barrier
adhesive that improves the ability of laminated packaging,
thereby helping extend the shelf life of food products, earninghigh marks from both customers and brand owners.

Materials printed with water-based printing inks

New Production Facilities Completed in Promising Markets

HIGHLIGHT

In light of a tapering of demand for publishing inks, news inks and other inks for paper-based print media, owing to the rising popularity of digital media, the DIC Group
is stepping up efforts to shift its focus to inks used on packaging for food products, demand for which is expected to expand substantially, particularly in emerging
economies. To this end, the Group is pressing ahead with efforts to establish production facilities in key markets. A new state-of-the-art mother plant in Turkey began
operations in June 2016, while a new facility in Indonesia that bolsters production capacity in that country commenced operations in July 2016.

Left: Mother plant in
Izmir, Turkey
Right: Production facility in
Surabaya, Indonesia

DIC Report 201714

Fine Chemicals

Optronics Materials andOther High-Value-Added
Products
President, Fine Chemicals Segment Hitoshi Wakabayashi

Products in this segment
include a wide variety ofmaterials indispensable todigital devices, includingorganic pigments for color
filters and LC materials,
which are expected to drive
growth for DIC in the years
ahead.

Key
Products

Pigments Product Division

Liquid Crystal Materials Product Division

Organic pigments; special effect pigments;
metal carboxylates; sulphur chemicals (lubricant additives)

TFT LCs; Supertwisted nematic (STN) LCs

A marked increase inbrightness and reduced LCD
energy consumption

Responding to the evolutionof LCDs
TFT LCs

G58 series*UHHQSLJPHQWVIRUFRORUÀOWHUVThe production of TFT LCs demands
advanced technological expertise. DIC is
one of only a few companies in the world
with such expertise. DIC’s technologies
ensure it is able to provide products that
respond to demands for faster response
times and greater long-term reliability.

In developing the G58 series of green pigments, DIC
GH¿HGFRQYHQWLRQDOZLVGRPE\XVLQJ]LQFUDWKHUWKDQ
copper, as the central metal, which achieves a marked
increase in brightness and reduces energy consumed
by the liquid crystal display (LCD).

Segment Operating Results
Net Sales(Billions of yen)

FY2015FY2016135.5

For more information, please see Segment Results on page 54.

FY2017 (Forecast)

134.793
134.7

128.2

Operating Income
and Operating
MarginFY2015(Billions of yen/ %)13.1

FY2017 (Forecast)

FY2016

15.2

14.4

11.3％

11.3％
9.7％

106.5

101.1

105.4

42.7

41.3

44.0

(13.7)(14.3)(14.6)

Japan

Overseas

Eliminations

5.1

7.1

7.2

8.1

7.5

8.0

Japan

DIC Report 201715

Overseas

Operating margin

Business Strategies Under DIC108
The DIC Group is powering growth in this segment by increasing value added.
To this end, the Group is capitalizing on its continuous product development and
VROLGVXSSO\FRQ¿JXUDWLRQWREROVWHULWVVKDUHRIWKHPDUNHWVIRUWKHVHJPHQW¶V
two key strategic products: functional pigments and TFT LCs.

Pigments
With the market for organic pigments for publishing inks—the principal sourceof demand for these products—shrinking, the DIC Group is working to increase
sales of functional pigments for niche and high-growth applications, including
SLJPHQWVIRUFRORU¿OWHUVSLJPHQWVIRUFRVPHWLFVDQGVSHFLDOHIIHFWSLJPHQWV,Q
WKHDUHDRISLJPHQWVIRUFRORU¿OWHUVWKH*URXSZLOOEURDGHQLWVOLQHXSRISURGXFWVthat help improve color and functions. The Group is also striving to augment its
recently acquired special effect pigments business in Europe by bolstering salesof high-value-added products and reinforcing its production capacity for pigments
used in building materials. To expand its pigments for cosmetics business, theGroup has broadened its focus to include pigments for skincare products andis taking steps to increase its production and sales of red pigments, demand forwhich continues to rise, as well as to boost sales in Japan.

LC materials
With an emphasis on n-type TFT LCs, the principal type of LCs used in largescale displays in LCD televisions and other devices and is actively bringing
new products to market, the DIC Group is actively allocating resources to thedevelopment of new products. The Group is also maximizing its technical andproduction base in Qingdao to augment its operations in the PRC, which is
expected to be a major center of LCD manufacturing going forward.

TFT LCs used in LCD televisions

Progress of Major Initiatives in Fiscal Year 2016
Pigments
Shipments of functional pigments rose steadily, underpinned bygenerally firm demand. Of particular note, sales of pigments forcosmetics increased substantially, reflecting firm sales of products
using processing technologies obtained through the acquisition of a
PDQXIDFWXUHULQ¿VFDO\HDUDQGWKHIDFWWKDWUHG²DWUDGLWLRQDO',&
Group strength—was in fashion for cosmetics during the period. In thearea of special effect pigments, the Group pressed ahead with efforts
to expand the capacity of its pigment production facilities in Poland andRussia in response to growing demand.

the PRC as the Group stepped up R&D and sales initiatives with the
JRDORIVWUHQJWKHQLQJVDOHVLQ¿VFDO\HDU

LC materials
Ongoing development efforts in the area of LCs that reduce the energy
consumption of large LCDs yielded new products that helped enhance
VDOHV,QWKHVHFRQGKDOIRI¿VFDO\HDUDQHZSURGXFWWKDWERRVWVLCD response speed was adopted for use by an LCD manufacturer inSales of pigments for cosmetics continue to rise, led by red pigments

DIC Group Bolsters Production Capacity for Aluminum Powders and Pastes for AAC

HIGHLIGHT

7KHH[FHOOHQW¿UHUHVLVWDQFHWKHUPDODQGDFRXVWLFLQVXODWLQJSURSHUWLHVDQG
workability of autoclaved aerated concrete (AAC) make it suitable for a broad
range of construction applications, including houses, high-rise buildings,
HOHFWULFSRZHUSODQWVUHWDLQLQJZDOOVIRUWUDQVSRUWDWLRQLQIUDVWUXFWXUHURR¿QJ
and floor panels. Global demand for AAC, which is recyclable and emits
no VOCs, continues to increase by between 7% and 8%, a trend that is
expected to persist for the foreseeable future. The DIC Group manufactures
aluminum powders and pastes used as foaming agents. With demand forboth products expanding, the Group is bolstering the capacity of its two
production facilities, which are located in Poland and Russia.
Production facility for aluminum powders and pastes in Poland currently
undergoing expansion

DIC Report 201716

Polymers

DIC’s Second Core
Business
President, Polymers Segment Toshio Hasumi

Capitalizing on DIC’s worldclass technologies andknow-how, this segmentprovides synthetic resins andresin-related products to awide array of industries.

Key
Products

Polymers Product Division:DWHUERUQHUHVLQV89FXUDEOHUHVLQVDFU\OLFUHVLQVPHWKDFU\ODWHUHVLQVHSR[\UHVLQVSKHQROLFUHVLQVÀXRURFKHPLFDOVpolyurethane resins; polyester resins; plasticizers; unsaturated polyester resins; polystyrene; alkylphenols

Environment-friendly nextgeneration adhesives that
respond to diverse needs

Technologies that facilitate the controlof light for applications ranging fromGLVSOD\FDVHVWRRSWLFDO¿EHUV

TYFORCE series(Moisture-curing hot melt adhesives)

DEFENSA OP series(Low-refractive index UV-curable resins)

This series of solvent-free adhesives delivers
superb production efficiency and bonding strength.
These resins have been adopted for a wide range ofapplications, including building materials, apparel andelectronic components.

Used for optical fiber cladding and opticalcoatings, the DEFENSA OP series of lowrefractive index UV- curable resins helps
improve the performance of optical fibers andthe brightness of display cases.

Segment Operating Results
Net Sales(Billions of yen)

FY2015FY2016FY2017 (Forecast)

3,793

194.6

56.0

For more information, please see Segment Results on page 54.

198.3

180.9

Operating Income
and Operating
Margin(Billions of yen / %)FY2016FY2017 (Forecast)

19.6

21.0

10.9％

10.6％

55

16.0

58.9

50.1

FY2015

6.7

6.5

12.9

14.5

8.2％

7.3
143.3

46

145.5

136.4

8.6
(5.6)

(4.7)
Japan

Overseas(6.0)
EliminationsJapan

DIC Report 201717

Overseas

Operating margin

Business Strategies Under DIC108
Product strategy
The DIC Group is concentrating management resources on
strategic products, namely, waterborne, UV-curable, acrylic,polyurethane and polyester resins, and accelerating global
development with a focus on promising markets, notably thosefor coatings and adhesives in Asia.

With demand on the decline in Japan, the Group is integrating
and closing production lines while at the same time pursuingmarkets for polyurethane and UV-curable resins for niche andhigh-performance applications, thereby lifting the weighting of
high-value-added products in its portfolio.

Regional strategy
Capitalizing on technical centers established in Thailand andthe PRC, the Group is responding to increasingly stringent
environmental regulations by offering waterborne, solventfree and other environment-friendly products, as well as byadvancing the development and sale of offerings that respondto needs for general-purpose products and boosting overseas
sales as a percentage of overall segment sales.

Demand for environment-friendly products for use in coatings is increasing overseas

Progress of Major Initiatives in Fiscal Year 2016
Development of high-performance products
In the area of products for electronics applications, a key
strength, the DIC Group advanced the development of a varietyof new products. These include fluorosurfactants for use as
resists and other types of leveling agents, a specialty curing
agent for epoxy resins that can be used in servers employed insophisticated telecommunications infrastructures, a nanoimprint
lithography (NIL)-compatible resist resin and a phenolic resinbinder for sand casting 3D printers.

environment-friendly products, as well as on implementing
marketing initiatives with a view to an assertive entry into thepromising Indian market.

Regional trends
In Japan, the Group pressed forward with the consolidation of
production lines for commoditized products and the introductionof equipment for the production of high-value-added offerings.
Elsewhere in Asia, efforts centered on bolstering sales ofSample of a 3D printer–generated sand-cast mold made with DIC’s
phenolic resin binder

Polymer Technical Centers Support Efforts to Expand Operations in Key Growth Markets
DIC has established polymer technicalcenters in the PRC and Thailand with the aimof locking in demand for polymers in Asia,
which is expected to increase in the future, by
hastening the development of products thatmeet the needs of local customers. In addition
WRUDLVLQJWKHHI¿FLHQF\RIGHYHORSPHQWWKHVH
facilities promote collaboration with local
Group companies in the printing inks andother businesses, as well as provide training
for local technical staff, thereby supporting theimplementation of global polymer businessstrategies.

HIGHLIGHT*URXS7HFKQLFDO&RQÀJXUDWLRQLQWKH35&
DIC (China) Co., Ltd.

Polymer Technical Center—
China
DIC Synthetic Resins (Zhongshan) Co., Ltd.

Changzhou Huari New Material Co., Ltd.

DIC Zhangjiagang Chemicals Co., Ltd.
DIC Report 201718

Compounds

New Value Created throughDispersion and Compounding
Technologies
President, Compounds Segment Masanobu Mizukoshi

This segment leverages resinand pigment dispersion andcompounding technologies
accumulated since DIC’s
founding to provide productsthat respond to needs inthe expanding global digitalprinting, automotive andelectronics markets.

Key
Products

Liquid Compounds Product Division

Solid Compounds Product Division,QNMHWLQNV¿EHUDQGWH[WLOHFRORUDQWVDQGDUWL¿FLDOOHDWKHUFRORUDQWVKLJKSHUIRUPDQFHFRDWLQJVDQGDGKHVLYHPDWHULDOVFRDWLQJVIRURSWLFDO¿OPV

PPS compounds; high-performance compounds;
plastic colorants; high-performance optical materials

Helping customers
realize outstanding color
development and gloss

Contributing to therealization of lighter, more
IXHOHI¿FLHQWYHKLFOHVSunJet inkjet inks

DIC.PPS series (PPS compounds)

Advanced DIC Group pigment dispersion
te c h n o l o g i e s e ns u r e exc e l l e nt c o l o rdevelopment and a glossy finish. With areputation for reliability, SunJet inkjet inks
enjoy popularity in markets around theworld.

The DIC Group’s PPS compounds boast excellent heatand chemical resistance, rigidity, strength and electricalinsulating properties, as a result of which they have foundapplication in components for hybrid, electric and otherenvironment-friendly vehicles as an alternative to metalmaterials, which helps reduce vehicle weight.

Segment Operating Results
Net Sales

FY2015FY2016FY2017 (Forecast)(Billions of yen)

For more information, please see Segment Results on page 54.
Operating Income
and Operating
Margin(Billions of yen/ %)

63.6
33.3

34.9

39.5

39.2

41.6

(10.8)(11.5)(12.8)

Overseas

5.7

5.0

4.5

8.1％

7.1％

34.9

Japan

FY2017 (Forecast)

FY2016

9.0％

63.7

61.1

FY2015

2.7

3.0

EliminationsJapan

DIC Report 2017

19

2.4

2.0

2.5

2.6

Overseas

Operating margin

Business Strategies Under DIC108
The DIC Group is leveraging its growth-driving basic andcomposite technologies to continuously bring new products thatsatisfy the needs of users to market in the strategically important
areas of inkjet inks and PPS compounds. Through such efforts,
the Group is striving to realize a higher growth rate than themarket.

Inkjet inks
To date, the DIC Group has sought to augment this businessby focusing on high-value-added water-based and UV-curable
LQNMHWLQNVSULPDULO\IRULQGXVWULDODQGRI¿FHUHODWHGDSSOLFDWLRQVIn addition to boosting sales in these markets, the Group is
expanding efforts to market products for new applications suchas textiles and ceramics, demand for which is expected to rise.

PPS compounds
Valued for their excellent heat and chemical resistance,
PPS compounds are used widely as an alternative to metalmaterials in components for automotive engines and electronics
equipment. To maintain its leading share of the global market,
the DIC Group is promoting the expansion of production facilities
with the aim of stabilizing its global supply configuration. The
Group is also increasing the number of employees in sales andtechnical services for key automobile and automotive component
manufacturers to enhance the accuracy and speed with which
DIC Group products obtain approval from manufacturers.

Progress of Major Initiatives in Fiscal Year 2016
Inkjet inks
Leveraging its network of production facilities, the DIC Group
responded to the needs of customers worldwide by shifting tooverseas production for certain products previously exported
from Japan. This move helped improve the efficiency of theGroup’s global supply chain.

PPS compounds
The Group completed a new dedicated PPS compound
production facility in the PRC, the world’s largest producer of
automobiles in terms of volume. By making effective use of
its previously established local technical service center, theGroup took steps to encourage adoption of its products by
manufacturers. The Group also completed construction of a
production line at the Kashima Plant for PPS neat polymer—the principal raw material in PPS compounds—as scheduled
LQ'HFHPEHUWKHUHE\FUHDWLQJDVXSSO\FRQ¿JXUDWLRQWKDW
will enable it to respond to expanding demand.

New PPS compound production facility in the PRC

New PPS Compound Suitable for LDS Developed

HIGHLIGHT

DIC recently succeeded in developing an innovative PPS compound suitable for use with laser direct structuring (LDS), a leading
MID process used for forming circuits on 3D molded components. The Company has also commenced sample shipments of the new
SURGXFW%HFDXVHLWIDFLOLWDWHVWKHLQWHJUDWLRQRIPXOWLSOHFRPSRQHQWVWKXVKHOSLQJUHGXFHZHLJKW/'6LVH[SHFWHGWR¿QGLQFUHDVHG
application in automobile manufacturing.

Process used for forming circuits on 3D molded components

Laser

Formation of circuits on a 3D molded component

LDS process

Laser activation

Molded plastic doped with organic metallic compound

Creation of circuit tracks

DIC Report 2017

20

Electroless plating

Application Materials

A Variety of Products Made
Possible by the Integration andApplication of DIC Technologies
President, Application Materials Segment Shinsuke Toshima

This segment encompasses adiverse range of products, including
industrial adhesive tapes, hollow¿EHUPHPEUDQHVDQGPRGXOHVDQG
coextruded multilayer films, which
are made possible through the
integration of proprietary materials
and coating, printing, molding andother technologies.

Key
Products

Application Materials Product Division,QGXVWULDODGKHVLYHWDSHVPDJQHWLFWDSHVDQGFRDWHGVKHHWVKROORZ¿EHUPHPEUDQHVDQGPRGXOHVFRH[WUXGHGPXOWLOD\HU¿OPVKHDOWK
foods and natural colorants; decorative boards, interior housing products and coatings for building materials; decorative sheets and
GHFRUDWLYH¿OPVVKHHWPROGLQJFRPSRXQGV 60&V EXONPROGLQJFRPSRXQGV %0&V DQGSURFHVVHGSURGXFWVPROGHGSODVWLFSURGXFWVEnhancing waterproof
smartphone construction

A superfood that provides abalanced wealth of nutrients

DAITAC WS#84 series(Double-sided adhesive tapes for waterproof
mobile communications devices)

DIC Spirulina
Spirulina is an edible blue–green algae rich invitamins, minerals and ß-Carotene that boasts an
excellent amino acid balance. Spirulina’s nutritional
value and popularity as an ingredient not only in healthfoods but also for culinary applications has earned it areputation as a superfood.

One of the first series of waterproof tapes to be
developed and marketed for waterproof smartphone
construction, the DAITAC WS#84 series continues tosupport efforts to enhance the ability of smartphones
to resist water ingress.

Segment Operating Results
Net Sales(Billions of yen)

FY2015FY2016

57.5

11.4

55.7
9.9

For more information, please see Segment Results on page 54.

FY2017 (Forecast)

56.7

Operating Income
and Operating
MarginFY2015

3.1(Billions of yen/ %)
0.6

2.1

10.8
0.6

1.9

52.7

2.5

Overseas

1.6

(9.9)

(6.9)
Japan

3.4％

55.9
1.5

(7.6)

5.5％

0.3
3.7％

53.7

FY2017 (Forecast)

FY2016

EliminationsJapan

DIC Report 201721

Overseas

Operating margin

Business Strategies Under DIC108
Having devised a new growth model, the DIC Group is stepping up the
expansion of its electronics and life sciences business. At the sametime, the Group is promoting decisive rationalization of its housing
products business.

Electronics and life sciences
In industrial adhesive tapes, the DIC Group is accelerating specin initiatives with global brand owners, as well as with nascentlocal brand owners in the PRC, with the goal of bolstering adoption
for use in smartphones and tablet computers. The Group is also
promoting development efforts with a view to entering the market for
YHKLFOHPRXQWHGGLVSOD\VLQWKHIXWXUH,QKROORZ¿EHUPHPEUDQHV
and modules, the Group is working to sustain high growth fordegassing modules used in inkjet printers, for which it holds
the leading global market share, and to make a full-scale entry

into the market for large degassing modules for water treatment
applications. The Group’s aims in the area of health foods are to
maintain high sales of Spirulina, a highly rated superfood, andto expand sales of Spirulina-derived natural blue food coloring
Linablue® in North America and Europe, taking advantage of a shift
in market preferences from synthetic to natural food colorings.

Housing products
In the area of unsaturated polyester resin molded products, the*URXSFRQWLQXHVZRUNLQJWRLPSURYHSUR¿WDELOLW\WKURXJKUHVWUXFWXULQJ
measures and decisive cost reductions. In laminated products, theGroup is revamping its business model for DIC200, a key strategic
building material, and implementing dramatic structural reforms. The
Group is also working to enhance the accuracy and accelerate the
SURFHVVRIJDLQLQJFHUWL¿FDWLRQIRUVHJPHQWSURGXFWVProgress of Major Initiatives in Fiscal Year 2016
Electronics and life sciences
Efforts to encourage the new adoption of DIC Group industrial adhesive
tapes for use in personal computers proceeded apace. In the area ofhollow-fiber membranes and modules, sales of products used for thedegassing of inkjet inks and in the manufacture of ultrapure water for
use in semiconductor fabrication were firm. In health foods, operationscommenced at the Group’s new natural blue colorant extraction plant
DWLWV6SLUXOLQDSURGXFWLRQIDFLOLW\LQWKH8QLWHG6WDWHVEXLOWLQ¿VFDO\HDU
2015, while efforts to elevate sales of Linablue® proceeded. The Group isin the process of further augmenting the plant’s capacity, with completion
VFKHGXOHGIRU¿VFDO\HDU

Housing products
In January 2017, DIC transferred its building and housing materials
business to wholly owned subsidiary DIC Decor, Inc. To date, the Grouphas operated housing products and related businesses as independent
business entities. The Group believes that combining these businesses
LQWRRQHHQWLW\ZLOOSRVLWLRQLWWRFRQGXFWSURGXFWGHYHORSPHQWWKDWUHÀHFWVD
more precise grasp of market needs and to enhance services.

+ROORZ¿EHUPHPEUDQHPRGXOHIRUGHJDVVLQJOLTXLGVProduction Capacity for Linablue® Natural Blue Food Coloring to be Further Expanded

HIGHLIGHT

Demand for natural blue food coloring Linablue ®, derived from edible blue–green algae
Spirulina, is rising dramatically, particularly in North America and Europe, underpinned
by a rapid shift in consumer preference toward natural food colorings. With the aim of
HIIHFWLYHO\ORFNLQJLQWKLVGHPDQGLQ¿VFDO\HDUWKH',&*URXSUHVROYHGWRLQFUHDVH
the capacity of its U.S. plant for extracting the natural blue colorant, which came on-line in¿VFDO\HDUZLWKDQH\HWRZDUGFRPSOHWLRQLQ¿VFDO\HDU

Linablue®
natural blue food coloring

Natural blue colorant extraction plant in the United States slated for expansion

DIC Report 201722

Product Development for a Sustainable Society
SpecialFeatureLeveraging the Power of Chemistry
to Create Value for Society$GGUHVVLQJLVVXHVUHODWHGWRFOLPDWHFKDQJHHQHUJ\IRRGVHFXULW\DQGGLVDVWHUSUHYHQWLRQLVRQHRIWKHPRVWVLJQL¿FDQWFKDOOHQJHVIDFLQJWKHZRUOGWRGD\The DIC Group is leveraging the power of chemistry to provide products that can help resolve such issues and further drive social sustainability.

Super Engineering Plastics
Coatings

Helping to Reduce Vehicle Weight, Improve)XHO(IÀFLHQF\DQG/RZHU&22 Emissions

Fibers
8%

1%

Films

1%

Compounds

90%

Applications for
PPS Polymer

Value Creation
Reduce vehicle weight by using highperformance PPS compounds as analternative to metal materials in
automotive components
The increasing danger posed by issues such as global
warming and air pollution has prompted many countries tointroduce even stricter fuel efficiency requirements, obliging
DXWRPDNHUVWRWDNHVWHSVDLPHGDWLQFUHDVLQJIXHOHI¿FLHQF\²
and in so doing lowering CO 2HPLVVLRQV²E\UHGXFLQJYHKLFOHZHLJKW:KLOHWKHPRGL¿FDWLRQRIHQJLQHVDQGWKHXVHRIGLIIHUHQW
materials for vehicle bodies and fuel tanks have had a positive impact,
efforts to integrate tens of thousands of components, as well as toswitch to resin as the principal material used therein, are also important
as automakers strive to achieve additional gram-level cuts. Further reducing
vehicle weight is a particularly critical challenge for hybrid, electric, fuel celland other environment-friendly vehicles that require the installation of heavy
batteries or fuel cells.
$JDLQVWWKLVEDFNGURSHIIRUWVWRDGYDQFHWKHXVHRIVXSHUHQJLQHHULQJSODVWLFV²
KLJKSHUIRUPDQFHSODVWLFVZLWKH[FHSWLRQDOUHVLVWDQFHWRKHDW²DVDQDOWHUQDWLYH
to metal materials in automotive components as a way to reduce vehicle weight haveprogressed.
DIC has focused particularly on PPS polymer, which weighs half as much aspr
DOXPLQXPDQGGHOLYHUVVXSHUEKHDWFKHPLFDODQGÀDPHUHVLVWDQFH6LQFH',&KDV
DOXP
promotedpromo PPS compounds with attributes suited to use in automotive components while atthe same
sam time expanding applications from gasoline- and diesel-powered vehicles to include
K\EULGHOHFWULFDQGIXHOFHOOYHKLFOHVWKHUHE\FRQWULEXWLQJWRLPSURYHGIXHOHI¿FLHQF\K\EULGHOH
Using life cycle assessment (LCA)*, a technique for evaluating a product’s environmental impact,
DIC has also demonstrated that using PPS compounds rather than aluminum for certain electronic
control components
lowers CO2HPLVVLRQVDWWULEXWDEOHWRVXFKFRPSRQHQWVE\URXJKO\±componused to assess the environmental impact of a product across all stages of its life, from raw material extraction through* LCA: A technique use
development, manufacture,
use and recycling or disposal.
m

DIC Report 2017

23

WEB

Value
Creation

A Distinctively
DIC
Response

Energyconservation

3Rs (“Reduce,
Reuse, Recycle”)

Aging
society

Safety /Peace of mind

HumanrightsHighly informationoriented society

Comfortable
lifestyles

Reduction ofsubstances that harmthe environment

5HGXFWLRQRI&2 2
emissionsImprovementof convenience

Food loss
reduction

Better productquality

http://www.dic-global.
com/en/csr/special$QLQWHJUDWHGFRQ¿JXUDWLRQHQFRPSDVVLQJHYHU\WKLQJIURPpolymer design through to molding compounds, underpinninga leading global market share$NH\',&VWUHQJWKLVLWVLQWHJUDWHGGHYHORSPHQWDQGSURGXFWLRQFRQ¿JXUDWLRQZKLFKencompasses everything from polymer design through to mixing and compounding,enabling it to provide products tailored to the need of automakers. Recently, theCompany developed a new compound for hybrid vehicles that combines the inherent
heat resistance and electrical insulating properties of PPS polymer with superior
strength, moldability and adhesiveness, among others, and which has been adopted
IRUXVHLQRXWSXWSRZHUFRQWUROVIRUEDWWHULHVDQGOLWKLXPEDWWHU\±UHODWHGFRPSRQHQWVIn light of rapidly expanding demand for PPS products worldwide, DIC has positioned
PPS compounds as a key business that will drive growth going forward under its
FXUUHQWPHGLXPWHUPPDQDJHPHQWSODQ',&DQGLVFXUUHQWO\SURPRWLQJWKH
systematic expansion of its PPS compound production facilities. The Company is also
increasing its annual production capacity for PPS compounds and has set a target for
UDLVLQJLWVVKDUHRIWKHJOREDO336FRPSRXQGVPDUNHWWRE\¿VFDO\HDU
,Q-XO\DQLQQRYDWLYH336FRPSRXQGGHYHORSHGE\',&IRUXVHZLWK/'6²DSURFHVVIRUIRUPLQJFLUFXLWVRQ'PROGHGFRPSRQHQWV²EHFDPHWKH¿UVW
such compound to gain approval for this application. A proprietary technology owned
by a German manufacturer of printed circuit board (PCB) production equipment, LDSPDNHVLWSRVVLEOHWRFUHDWHFLUFXLWWUDFNVRQ'PROGHGFRPSRQHQWVXUIDFHVZKLFKfacilitates the integration of multiple components and the reduction of component
VL]H7KHVHEHQH¿WVKDYHHQFRXUDJHGWKHH[SDQGHGXVHRI/'6E\PDQXIDFWXUHUV
of components for automobiles and medical devices. Materials produced for LDS
must be approved by LPKF. Drawing on the wealth of technologies it has built
up as a manufacturer of PPS compounds, DIC developed LP-150-LDS, the first
PPS compound that has met LPKF Laser & Electronics AG’s stringent standards
for approval. As it preserves the renowned heat and chemical resistance of PPS
products, LP-150-LDS can be used for automotive components, for which other LDSgrade materials are not suited. Expectations are thus high that its use will further
accelerate efforts to reduce the weight as well as number of vehicle components.

The DIC Group’s Global PPS Compound Production Network

Vienna, Austria
6,000 metric tonnes
Technical service centerFrankfurt

Zhangjiagang, PRC
6,000 metric tonnes
Technical service center
Shanghai

PPS Polymer
Komaki, Japan
23,000 metric tonnes
Technical service anddevelopment center
Chiba

Type

Kashima (Japan)

Branched, linear

Sodegaura (Japan)

Branched, linear

Total

Penang, Malaysia
4,500 metric tonnes
Technical service center
Penang

Key People from DIC

DIC’s principal strength is its close relations with automotive
components manufacturers and its swift responsiveness.
To encourage the further use of PPS compounds in new vehicle components, it is crucial that we
promptly grasp the technical requirements of customers and actively bring our proprietary know-how
and new technologies to facilitate collaborative development. We must also fully leverage our integrated
configuration, which encompasses everything from polymer design through to molding compounds, topromote the swift development and commercialization of new products. To these ends, we are creating
opportunities to share information and strengthen communication, including organizing technologicalexchange meetings, so as to expand our selection of applicable materials. The effectiveness of thisDSSURDFKUHÀHFWVWKHFRPSHWLWLYHDGYDQWDJHZHHQMR\WKDQNVWRRXUSURYHQWUDFNUHFRUGWRGDWH
Left: Senior Manager, Nagoya EP Sales Department, Solid Compounds Product Division

Plant

Kenji Hasegawa

Center: PPS Products Manager and Senior Manager, PPS Products Group, Solid Compounds Product Division Toshiyuki Mori
Right: Head Researcher, Polymer Processing Technical Group 2, Polymer Processing Technical Division Hirokiyo Nakase

DIC Report 201724

Annual production
capacity (Metric tonnes)

18,0005,000
23,000(QYLURQPHQW)ULHQGO\3RO\XUHWKDQH5HVLQVIRU8VHLQ$UWLÀFLDODQG6\QWKHWLF/HDWKHUV

3URYLGLQJ0DWHULDOVWKDW)DFLOLWDWH6DIH
DQG6HFXUH3URGXFWLRQDQG8VH

0'0)Emissions%

Environment-Friendly
Polyurethane Resins

Value Creation
3URPRWLQJHQYLURQPHQWIULHQGO\polymers worldwide:LWKWKHUDSLGWLJKWHQLQJRIHQYLURQPHQWDOUHJXODWLRQVin key global markets, including the PRC, a shift in
GHPDQGIURPVROYHQWEDVHGWRZDWHUEDVHGDQGVROYHQWIUHH
products poses a considerable challenge for manufacturers of
SRO\XUHWKDQHUHVLQV,QWKHSRO\PHUVEXVLQHVVWKH',&*URXSLVDGYDQFLQJWKHVZLIWGHYHORSPHQWRIHQYLURQPHQWIULHQGO\SURGXFWVWKDWUHVSRQGWRSHUWLQHQWODZVDQGUHJXODWLRQVDQGSURPRWLQJVDOHV
RIHQYLURQPHQWIULHQGO\SRO\PHUVZRUOGZLGH',&LVDFWLYHO\H[SDQGLQJ
its polymers business in the PRC, taking a multifaceted approach
WKDWLQFOXGHVJURZLQJPDUNHWVIRUSURGXFWVH[SRUWHGIURP-DSDQDQG
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HQYLURQPHQWIULHQGO\SRO\PHUVEXVLQHVVEH\RQGWKH35&WRRWKHUPDUNHWVLQ$VLD,QDGGLWLRQ',&LVH[SORULQJWKHLGHDRIFROODERUDWLQJZLWKWKH6XQ&KHPLFDO*URXS²D',&*URXSPHPEHU²WRHQFRXUDJHDEURDGHUPDUNHWSUHVHQFHLQWKH
$PHULFDVDQG(XURSH/RRNLQJDKHDGWKH',&*URXSZLOOWDNHGHFLVLYHVWHSVWRLQYHVWVWUDWHJLFDOO\DQGZRUNLQFROODERUDWLRQZLWKRWKHUFRPSDQLHVWRFUHDWHEXVLQHVVV\VWHPVIRUHQYLURQPHQWIULHQGO\SURGXFWVWRH[SDQGWKHVFDOHRIWKLVEXVLQHVVLQDPDQQHUWKDWUHVSRQGVWRPDUNHWQHHGV

Athletic shoes are constructed from multiple layers
RIDUWL¿FLDORUV\QWKHWLFOHDWKHUV,QGLYLGXDOOD\HUV
are supplied as shoe components and bonded
WRJHWKHUE\KDQG

Contributing to the manufacture of products
ZLWKDORZHUHQYLURQPHQWDOLPSDFW

7UHQGV6XUURXQGLQJWKH8VHRI'0)
VOC
emissions

6XUIDFHVNLQ
Adhesive layer%DFNLQJ

Artificial andsynthetic leathers
DMF

REACH
(Moves to ban useof DMF in the EU)
Sportswear
manufacturers(Declarationof elimination)
National policies in the
PRC and Taiwan (Stricter
regulations governing
solvent emissions)

DIC Report 201725

Bolstered by outstanding performance features and a shift in preference
IURPQDWXUDOWRDUWL¿FLDODQGV\QWKHWLFOHDWKHUVGHPDQGIRUSRO\XUHWKDQH
UHVLQVZKLFKDUHXVHGDVUDZPDWHULDOVDQGDGKHVLYHVIRUDUWLILFLDODQGV\QWKHWLFOHDWKHUVFRQWLQXHVWRLQFUHDVH+RZHYHUWKHSURFHVV
used to manufacture polyurethane resins for artificial and synthetic
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5HJLVWUDWLRQ(YDOXDWLRQ$XWKRULVDWLRQDQG5HVWULFWLRQRI&KHPLFDOV
5($&+ OLVWRIEDQQHGVXEVWDQFHV7KH',&*URXSZKLFKGHYHORSVDQGPDQXIDFWXUHVDGLYHUVHUDQJHRIVROYHQWERUQHDQGZDWHUERUQH
SRO\XUHWKDQHUHVLQVKDVVXFFHHGHGLQGHYHORSLQJDQGPDUNHWLQJ'0)
IUHHHQYLURQPHQWIULHQGO\SRO\XUHWKDQHUHVLQVZLWKSURSHUWLHVLGHQWLFDOWRWKHLUFRQYHQWLRQDOFRXQWHUSDUWV7KH*URXSLVFXUUHQWO\HVWDEOLVKLQJDIUDPHZRUNIRUSURYLGLQJWRWDOVROXWLRQVLQFOXGLQJUDZPDWHULDOVDQG
SURGXFWLRQV\VWHPVWRPDQXIDFWXUHUVRIDWKOHWLFVKRHV6SHFLDO)HDWXUH3URGXFW'HYHORSPHQWIRUD6XVWDLQDEOH6RFLHW\$'LVWLQFWLYHO\',&
Response

Combining core technologies to establish technologies
IRUWKHSURGXFWLRQRIHQYLURQPHQWIULHQGO\SRO\XUHWKDQH
resins$UWLILFLDO DQG V\QWKHWLF OHDWKHUV XVHG LQ DWKOHWLF VKRHV PXVW GHOLYHU DQ
DSSURSULDWHWH[WXUH VRIWWRWRXFKDQGVXIILFLHQWO\VWURQJ IOH[UHVLVWDQFH
DWURRPWHPSHUDWXUHDQGORZWHPSHUDWXUHVGXUDELOLW\DQGDOLJKWZHLJKW(QVXULQJFRPSHWLWLYHSURGXFWLRQFRVWVLVDOVRDNH\FRQFHUQ:LWKFRQYHQWLRQDO
VROYHQWERUQH SRO\XUHWKDQH UHVLQ WKH YDSRUL]DWLRQ RI VROYHQW IDFLOLWDWHV
the formation of a strong surface skin, resulting in a product that satisfies
SHUIRUPDQFHUHTXLUHPHQWV,QFRQWUDVWWKHXVHRIZDWHUERUQHUHVLQVKLQGHUVWKHDFKLHYHPHQWRIDKLJKPROHFXODUZHLJKWDQGHYHQJUDLQPDNLQJLWGLI¿FXOWWRUHDOL]HVXI¿FLHQWVWUHQJWKGXUDELOLW\DQGVFXIIUHVLVWDQFH
%\FRPELQLQJWKUHHNH\FRUHWHFKQRORJLHV²SRO\PHUGHVLJQWHFKQRORJLHV
used in HYDRANZDWHUERUQHDGKHVLYHSRO\XUHWKDQHUHVLQVPRLVWXUHFXULQJ
technologies used in TYFORCEVROYHQWIUHHKRWPHOWDGKHVLYHVDQGIRDP
H[SDQVLRQDQGUHDFWLYLW\FRQWUROXVHGLQPANDEX thermosetting polyurethane
UHVLQV²',&KDVVXFFHHGHGLQGHYHORSLQJ'0)IUHHSRO\XUHWKDQHUHVLQVWKDWDUHFRPSDUDEOHLQTXDOLW\WRFRQYHQWLRQDOVROYHQWERUQHSURGXFWVDVZHOODVDKLJKO\HI¿FLHQWSURGXFWLRQV\VWHPWKDWVKRUWHQVSURFHVVWLPHVWKHUHE\UHGXFLQJ
HQHUJ\FRQVXPSWLRQDQGSURGXFWLRQFRVWV',&·V(QYLURQPHQW)ULHQGO\3RO\XUHWKDQH5HVLQ3URGXFWLRQ6\VWHP
Development of
DMF-free resins
Conventional resins
Solventborne
Surfaceadhesives
skin
Adhesive
layer

Solventborne
adhesives

Backing

Solventborne
adhesives

Shift towaterborne
products

Step 1

Step 2

Waterborne

Waterborne
Higherperformance

Waterborne
Waterborne

Improved
adhesion andfoaming

Solvent-free adhesives
Waterborne

Creating a production system that combines three key
elemental technologies from DIC’s polyurethane resins business
Polymer design
technologies usedin HYDRAN
waterborne adhesive
polyurethane resins

VOC-freeFoam expansion
Moisture-curing
technologies used and reactivity control
in TYFORCE
used in PANDEX
solvent-freethermosetting
hot-melt adhesives polyurethane resins

Foaming technologies
used in the production of
PVC and rubber (pyrolytic
chemical foaming agents)(pyrolytic foaming technologies)

Energysavings

DMF-freeShorter
processtimes

3URYLGLQJDWRWDOSURGXFWLRQV\VWHPWKDWH[WHQGVWR
processing rather than simply supplying materials$Q HQYLURQPHQWIULHQGO\ SURGXFWLRQ V\VWHP UHTXLUHV QRW RQO\ SURGXFWLRQWHFKQRORJLHV EXW DOVR SURFHVV GHVLJQ WHFKQRORJLHV ',& FROODERUDWHG ZLWKHTXLSPHQWPDQXIDFWXUHUVWRGHYHORSSURGXFWLRQSURFHVVHVRSWLPL]HGWRVXLWSURGXFWSURSHUWLHVDQGLQILVFDO\HDUFRPSOHWHGDV\VWHPZKLFKLWZLOOSURYLGHWRFXVWRPHUVWRJHWKHUZLWKPDWHULDOV7RHQVXUHVZLIWGHOLYHU\WRWKH35&SURGXFWLRQEDVHVRIOHDGLQJJOREDODWKOHWLFVKRHVPDQXIDFWXUHUVWKHV\VWHPZLOOEHVXSSOLHG
WKURXJK7DLZDQEDVHG*URXSFRPSDQ\/LG\H&KHPLFDO&R/WG',&ZLOOHQGHDYRU
WRHVWDEOLVK WKLV V\VWHPZKLFKIDFLOLWDWHVORFDOSURFXUHPHQW RI ERWK UHVLQ DQGHTXLSPHQWDVDQHQYLURQPHQWIULHQGO\JOREDOVWDQGDUGDFURVVDZLGHUDQJHRILQGXVWULHV2ISDUWLFXODUQRWH',&¶VQHZWRWDOSURGXFWLRQV\VWHPUHVSRQGVWRWKH
HQYLURQPHQWDOUHTXLUHPHQWVRIDXWRPDNHUVIRUPDWHULDOVXVHGLQYHKLFOHLQWHULRUV$FFRUGLQJO\WKH&RPSDQ\ZLOOFRQWLQXHZRUNLQJDFWLYHO\WRLPSURYHWKHWH[WXUHDQG
GXUDELOLW\ UHVLVWDQFHWRGDPDJHIURPZHDUVHEDFHRXVPDWWHUFKHPLFDOVKHDWOLJKWDQGPRLVWXUH RIDUWL¿FLDODQGV\QWKHWLFOHDWKHUVSURGXFHGXVLQJWKHV\VWHPDVZHOODVWRSURPRWHWKHV\VWHP¶VDSSHDOLQWKHPDUNHWKey People from DIC

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7KHSDVVLQJRILQFUHDVLQJO\VWULQJHQW92&HPLVVLRQVUHJXODWLRQVZRUOGZLGHLVWHVWLQJWKHWHFKQRORJLFDO
FDSDELOLWLHVRIFKHPLFDOVFRPSDQLHV:HUHFRJQL]HWKLVWUHQGDVDJROGHQRSSRUWXQLW\WROHYHUDJHRXUFRPSUHKHQVLYHVWUHQJWKVWRH[SDQGRXUEXVLQHVV6XFFHVVLQWKHSRO\XUHWKDQHUHVLQVEXVLQHVVWRGD\GHPDQGVPRUHWKDQWKHDELOLW\WRSURYLGHPDWHULDOV:LWKFRQVLGHUDWLRQIRUWKHHQYLURQPHQWRXUJXLGLQJREMHFWLYHZHEHOLHYHLWLVSRVVLEOHIRUXVWRGH¿QHD
QHZJOREDOVWDQGDUGE\SURYLGLQJHQWLUHSODQWVLQRWKHUZRUGVFRPSUHKHQVLYHVROXWLRQV7KLVGLVWLQFWLYH
EXVLQHVVVWUDWHJ\LVPDGHSRVVLEOHE\WKH',&*URXS¶VWKRURXJKJUDVSRIDOOWKHWHFKQRORJLHVLQYROYHG
IURPSRO\PHUGHVLJQWKURXJKWRSURGXFWLRQDVZHOODVLWVJOREDOQHWZRUNRISURGXFWLRQIDFLOLWLHV
Left: General Manager, Osaka Urethanes Sales Dept., Polymers Product Division Masahiro Nishi
Right: Group Manager, Polymer Technical Group 6, Polymer Technical Div. 2 Tamotsu Sakamoto

DIC Report 201726

DIC’s Environment-Friendly Polyurethane
Resin Production System (Promoting Local
Consumption of Local Products)

DIC

Brand andknow-how

Delivery of
products

DIC Group(Taiwan)Japan

Athletic shoes
manufacturers

Supplier

End users

Delivery ofequipment

Equipment
manufacturers

PRC

Global market

Special Feature: Product Development for a Sustainable Society

IZANO Folding Emergency Helmets

Delivering Easy Storability and Portability,
IZANO Helmets Help Prevent and Mitigate
Injuries in Disaster Situations

350

Cumulative sales since launch (2013)

More thanthousand(As of March 2017)

Value Creation
Design a helmet that is suitable for use in
self-help, mutual aid and public assistanceinitiatives during disaster situations
Helmets are indispensable in protecting the heads of people
evacuating during a disaster from falling objects such as roof
tiles and shards of glass. Wearing a helmet keeps one’s hands
free, reducing the risk of stumbling and allowing one to proceedsafely while carrying a flashlight. Accordingly, there is a clear
GHPDQGIRUHPHUJHQF\KHOPHWVWKDWRIIHUERWKHI¿FLHQWVWRUDELOLW\DQG
outstanding performance and that can be used not only for evacuation but
also for post-disaster recovery and reconstruction efforts.
Thanks to a split ring-format folding structure, IZANO
helmets pop open instantly simply by pushing thecenter portion up. The volume of IZANO helmets isapproximately 60% lower than conventional helmets,
making them easy to store and to carry around.

A Distinctively
DIC
Response

An attractive helmet that boasts
SURIHVVLRQDOOHYHOVSHFL¿FDWLRQVLVHDVLO\stored and has sold upwards of 350 thousand units to date

DIC’s ability to develop an outstanding design and structure, produce prototypes, conduct tests
DQGDQDO\]H¿QGLQJVZLWKLQWKH',&*URXSLVDNH\VWUHQJWK*URXSFRPSDQ\',&3ODVWLFV
Inc., recently developed the IZANO helmet, which combines outstanding strength, storability
DQGSRUWDELOLW\7KH¿UVWQRQVHSDUDWLRQIROGDEOHKHOPHWWRFRPSO\ZLWKVWDQGDUGVIRUKHDGJHDU
that protects against head injuries caused by flying and falling objects and falls from highplaces established by Japan’s Ministry of Health, Labour and Welfare (MHLW), the IZANOKHOPHWZDVDOVRDGRSWHGE\WKH7RN\R0HWURSROLWDQ3ROLFH'HSDUWPHQWIRURIIGXW\SHUVRQQHO
mobilized in the event of a disaster. The IZANO helmet is also used widely on construction
VLWHVDQGSURGXFWLRQÀRRUV0RUHWKDQXQLWVKDYHEHHQVROGVLQFHWKHKHOPHWZDV
launched in October 2013. The IZANO helmet also received an award in the 2014 edition of-DSDQ¶V*RRG'HVLJQ$ZDUGVManager in Charge,
Safety Materials Sales Group,
Safety Materials Sales Department,
DIC Plastics, Inc.

Yoshitaka Ikegami

Ke y P e r s o n f r o m D I C

A female architect told me this was exactly the helmet she has been looking for.
When we exhibited IZANO helmets at a trade fair, a female architect said that the IZANO helmet wasexactly what she had been looking for. She went on to tell me that she could not stand the helmets
usually handed out to visitors at construction sites and had been searching for a helmet that delivered
both professional-level performance and an attractive design, and that could be carried in her bag.
In that our aim had been to develop a helmet that was not only suited to disaster situations but also
boasted outstanding versatility, her comments made me extremely happy. I look forward to developing
other innovative products that respond precisely to the diverse needs of our customers.
DIC Report 201727

TOPICWEB+HOSLQJ,PSURYH)RRG3DFNDJLQJWR([WHQG3URGXFW6KHOI/LIH
Sun Chemical Promotes Initiatives Aimed at Addressing an Important Social Imperative

http://www.dic-global.com/en/csr/
special/topics.html

6XQ&KHPLFDOZKLFKRYHUVHHVWKH',&*URXS¶VRSHUDWLRQVLQ(XURSHDQGWKH$PHULFDVLVRQHRIWKHZRUOG¶VOHDGLQJPDQXIDFWXUHUV
of printing inks. The company develops and supplies a broad range of products that address diverse social imperatives.

万

Shelf life and the lightweighting of packaging are business-critical activities for brandowners in today’s marketplace. Under the increasing scrutiny of regulations worldwide,
packaging must protect products, giving them optimal freshness and shelf life, whether in transit, in-store or athome. This applies as much to products with a long shelf life as to fresh produce, which needs packaging that will
preserve color, fragrance, texture and appeal, as well as ensure that it remains safe to consume.
Many external factors impact negatively on shelf life and freshness, from oxygen and UV light to moisture andRGRUV3URWHFWLYHSDFNDJLQJQHHGVWREHIXQFWLRQDO:KLOHWUDGLWLRQDOSDFNDJLQJPDWHULDOVVXFKDVJODVVDQGPHWDO
are impermeable, their weight can be a disadvantage, increasing transportation costs and carbon footprint.
This has led to the trend of utilizing plastic packaging formats, including pouches, but to create packaging
that enhances shelf life, these must be carefully structured to deliver optimum shelf life, in some cases
using a considerable number of layers.
Social Imperative

The packaging market’s need for products that deliver enhanced shelf life, as well as sustainable, recyclable, metalSun Chemical’s free and waste-reducing solutions, can be addressed through a revolutionary approach that replaces current barrier
Response
technology with printable oxygen-barrier coatings.
Sun Chemical’s SunBar ® (Aerobloc) oxygen-barrier coatings are technically advanced next-generation products
designed to enable the lightweighting of packaging by removing
ethylene vinyl alcohol (EVOH) polymer layers, as well as offering
Polymer ﬁlm
Ink
improved laminate flexibility. SunBar ® (Aerobloc) oxygen-barrier
Adhesive
MET polymer ﬁlm
coatings provide a smooth, homogenous, pinhole-free layer that can
Adhesive
Polymer ﬁlm
be easily overprinted with inks and laminated to a variety of secondary
films. These coatings are cost-effective, compostable and printablewith either flexo or gravure inks, allowing for lighter-weight packaging,
Polymer ﬁlm
Barrier coatinga reduced carbon footprint and easy application with few changes toInk
Adhesivecurrent equipment.
Polymer ﬁlm
Sun Chemical’s recent partnership with acpo, ltd., allows the latter todeliver SunBar ® (Aerobloc) pre-coated films to converters who cannot
coat their own films. acpo specializes in coating thin films with state-ofthe-art equipment. These customers now have access to economically
priced alternative barrier films with improved barrier protection without
the need for capital investment in a coating unit.
from theDIC Groupcing.
VOICE SunBar ® (Aerobloc) can resolve many of the challenges that brand owners are facing.
Brand owners today face a variety of challenges—from sustainability, regulatory complianceand food safety to lightweighting packaging to cut costs—while at the same time enhancing
product shelf life. Coated plastics offer barrier improvements, but also have downsides thatpose substantial hurdles to overcome. SunBar ® (Aerobloc) oxygen-barrier coatings serve as asolution to offset these deficiencies and can resolve many of the challenges that brand owners
are facing in today's competitive marketplace.
Product Manager, Coatings, Sun Chemical Corporation Robert O'Boyle

DIC Report 201728

Directors, Corporate Auditors and Executive Officers(As of April 2017)

Directors

1

Representative Director

3

Director

5 Director

7

Director*

9

Director*

Yoshiyuki Nakanishi Yoshihisa Kawamura Kaoru Ino Takao Suzuki Kazuo Tsukahara
2

Representative Director

Masayuki Saito

4

Director

6 Director

8

Director*

8

6

5

7

9

* Outside

Hitoshi Wakabayashi Hideo Ishii Yukako Uchinaga
3

1

2

4

Corporate Auditors
1

Corporate Auditor

Jiro Mizutani2

Corporate Auditor

Yoshiyuki Mase
3

Corporate Auditor*

Katsunori Takechi
4Corporate Auditor*

Cindy Yoshiko Shirata* Outside

3

2XWVLGH'LUHFWRU3URÀOHV
Takao Suzuki

1

2XWVLGH&RUSRUDWH$XGLWRU3URÀOHV
Kazuo Tsukahara

Katsunori Takechi

January 2006 Vice President and Executive Officer, Hitachi, Ltd.
April 2008 Director and Managing Executive Officer, IHI CorporationJune
2016 Representative Executive Officer, Hitachi Transport System, Ltd. April 2012 Representative Director and Executive Vice President, IHI Corporation
Outside Director, DIC Corporation
June 2014 Adviser, IHI CorporationJune
2016 Chairman Emeritus, Hitachi Transport System, Ltd.

April
2000 Public Prosecutor, Civil Affairs Bureau, Ministry of Justice
October 2003 Joins Anderson Mori and Tomotsune
July
2011 Managing Partner, Takechi & Partners

Yukako Uchinaga

Cindy Yoshiko Shirata

April2004 Director and Senior Executive Officer, IBM Japan, Ltd.
October 2009 Director and Executive Vice President, Benesse Holdings, Inc.
April
2013 Honorary Chairman, Berlitz Corporation

April
2002 Professor, Nihon University College of Economics
February 2010 Visiting Professor, University of Munich
October 2014 Professor, Faculty of Business Administration, Bunkyo University

DIC Report 2017

29

2

4

([HFXWLYH2IÀFHUV

President and CEO

Executive Vice PresidentManaging Executive Officer

Managing Executive Officer

Yoshiyuki Nakanishi

Masayuki Saito

Yoshiaki Masuda

Toshio Hasumi

Aide to the President and CEO
CFO
Chairman of the Board, Sun Chemical Corporation
Chairman of the Supervisory Board,
Sun Chemical Group Coöperatief U.A.

In Charge of General Affairs and Legal Division

President, Polymers Segment
General Manager, Polymers Product Division

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Hitoshi Wakabayashi

Kazunari Sakai

Hideo Ishii

Masami Hatao

President, Fine Chemicals Segment
General Manager, Pigments Product Division

Managing Director, DIC Asia Pacific Pte Ltd

President, Printing Inks Segment
General Manager, Printing Inks Product Division.
and Printing Inks Production Division

General Manager, Marketing Division

Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Kaoru Ino

Toshifumi Tamaki

Naoyoshi Furuta

Rudi Lenz

In Charge of Corporate Strategy Division and
Kawamura Memorial DIC Museum of Art

In Charge of Technical Segment (Technical
Administrative Division and Corporate R&D Division)
General Manager, Technical Administrative Division

Deputy Managing Director (South Asia),
DIC Asia Pacific Pte Ltd

President and CEO, Sun Chemical Corporation

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Masaya Nakafuji

Koji Tanigami

Shinsuke Toshima

Chairman and General Manager,
DIC (China) Co., Ltd.
Chairman, DIC (Shanghai) Co., Ltd.

General Manager, Corporate Planning Department
In Charge of Osaka Branch Office andNagoya Branch Office

President & CEO, DIC Graphics Corporation

President, Application Materials Segment
General Manager, Application Materials
Product Division

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Sakae Yoshida

Taihei Mukose

Kiyotaka Kawashima

Masanobu Mizukoshi

General Manager, Production Administrative
Division

In Charge of Purchasing and Logistics &Information Systems Division
General Manager, Purchasing Department

General Manager, Corporate R&D Division andCentral Research Laboratories

President, Compounds Segment
General Manager, Liquid Compounds
Product Division

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Hiroyuki Ninomiya

Kazuo Hatakenaka

Paul Koek

Myron Petruch

In Charge of Finance and Accounting Division

General Manager and Senior Manager,
Liquid Crystal Materials, Liquid Crystal
Materials Product Division

Chief Financial Officer, Regional Financial
Director, DIC Asia Pacific Pte Ltd

President, Performance Pigments,
Sun Chemical Corporation

Hideki Inouchi

DIC Report 201730

Corporate Governance
Basic Approach to Corporate Governance
7KH',&*URXSLGHQWL¿HVWKHSXUSRVHRIFRUSRUDWHJRYHUQDQFHDVEHLQJWRHQVXUHHIIHFWLYHGHFLVLRQPDNLQJSHUWDLQLQJWRLWV
PDQDJHPHQWSROLF\RIDFKLHYLQJVXVWDLQDEOHFRUSRUDWHJURZWKDQGH[SDQVLRQWKURXJKVRXQGDQGHI¿FLHQWPDQDJHPHQWZKLOH
at the same time guaranteeing the appropriate monitoring and assessment of and motivation for management’s executionof business activities. With the aim of achieving a higher level of trust on the part of shareholders, customers and otherstakeholders and enhancing corporate value, the DIC Group also promotes ongoing measures to reinforce its management
system and ensure effective monitoring thereof.

Policy on Corporate Governance
DIC has prepared a Policy on Corporate Governance, which it has published on its corporate website.
Policy on Corporate Governance WEB http://www.dic-global.com/en/about/pdf/governance_en.pdf

Corporate Governance Organization
A company with internal auditors, DIC maintains a Board of Directors and a Board of Corporate Auditors. DIC has also instituted an
H[HFXWLYHRI¿FHUV\VWHPDQGKDVHVWDEOLVKHGD1RPLQDWLRQ&RPPLWWHHD5HPXQHUDWLRQ&RPPLWWHHDQ([HFXWLYH&RPPLWWHHDQGD
Sustainability Committee.

Corporate Governance Organization

Meeting of Shareholders
Appointment

Appointment

Audit

Board of Directors
Nomination Committee

Accounting
audit

President and CEO

Remuneration Committee
Sustainability Committee

Internal Control Department

Board of Corporate Auditors

Accounting auditors

Executive Committee

Product divisions, Marketing Division, Production Administrative Division,
Technical Administrative Division, Corporate R&D Division,
headquarters’ administrative divisions, offices

Group companies

Internal audit

1 Board of Directors
To accelerate decision making and reinforce corporate governance, nine directors have been elected to the Board of Directors. Of
the nine, three are outside directors. In principle, the Board meets once monthly. The Board of Directors is responsible for making
decisions on matters stipulated in the Companies Act of Japan, and in DIC’s own regulations, as requiring Board-level approval, as
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2 Nomination Committee
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3 Remuneration Committee
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4 Executive Committee
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also attended by one corporate auditor as part of the auditing process. Details of deliberations and resolutions are reported to theBoard of Directors.
5 Sustainability Committee
The Sustainability Committee, which functions as an advisory body, meets several times annually to formulate sustainability policies
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by the Board of Directors. As part of audit activities, one corporate auditor also attends Sustainability Committee meetings. The
committee reports the matters upon which it deliberates and the results of its deliberations to the Board of Directors.
6 Board of Corporate Auditors
The Board of Corporate Auditors comprises four members, including two outside corporate auditors. In principle, the Board of
Corporate Auditors meets once monthly. Board activities include debating and determining auditing policies and auditing plans. Board
members also report on the results of audits conducted.
7 Internal Auditing Department
The internal auditing department is charged with internal auditing, which includes monitoring the effectiveness of internal controls at',&DQGGRPHVWLF',&*URXSFRPSDQLHV)RU',&*URXSFRPSDQLHVLQ$VLD2FHDQLDWKH35&WKH$PHULFDVDQG(XURSHLQWHUQDO
auditing is the responsibility of local internal auditing teams.
8 Accounting Auditors
DIC has engaged Deloitte Touche Tohmatsu LLC as its independent auditors. DIC strives to ensure an environment that facilitates theaccurate disclosure of information and fair auditing.

Rationale Behind Current Corporate Governance Organization
DIC has instituted an executive officer system, a move aimed at separating decision making and implementation and thereby
accelerating business execution and clarifying responsibilities. As well as appointing three highly independent outside individuals to
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attorney and one university professor as outside corporate auditors, liaises with the accounting auditors and the internal auditing
department. This structure ensures the effective functioning of DIC’s corporate governance system.

Status of the System of Internal Controls
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safeguard its assets. To this end, DIC has prepared and operates a system of internal controls to ensure proper business activities,
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annual reports on measures on the status of the system of internal controls, a summary of which is included in the Company’s reporton its business activities.

Outside Directors and Outside Corporate Auditors
1 Number and Role of Outside Directors and Outside Corporate Auditors
DIC currently has three outside directors and two outside corporate auditors. The three outside directors have extensive experience inand knowledge of corporate management, which they are able to leverage in the performance of their duties as outside directors of DIC.
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corporate governance. The two outside corporate auditors—one an attorney specializing in corporate law and the other an academic
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Group from an expert, multifaceted and independent perspective, thereby helping to reinforce the auditing function.

DIC Report 201732

2 Standards Used to Evaluate the Independence of Outside Directors and Outside Corporate Auditors
DIC has established standards for evaluating the independence of individuals appointed to the position of outside director or outside
corporate auditor. DIC’s outside directors and outside corporate auditors are individuals who, based on these standards, are unlikely
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Other Initiatives to Enhance the Corporate Governance Organization
1 Composition of the Board of Directors
With the aim or reinforcing its corporate governance organization, in
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of Directors from two to three. One member of the Board of Directors is
female, as is one member of the Board of Corporate Auditors.
Composition of the Board of Directors and the Board of Corporate Auditors
In-house

Outside

Total

Percentage ofoutside members

Directors

6

3

9

33.3%

Corporate
auditors

2

2

4

50.0%

Total

8

5

13

38.5%

Composition of the Board of Directors

38.5%
61.5%
Directors of DIC

Outside directors

2 Remuneration for Executives
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operating results and the degree of achievement of individual targets, and share-based compensation, which is linked to mediumWRORQJWHUPRSHUDWLQJUHVXOWV5HPXQHUDWLRQIRUFRUSRUDWHDXGLWRUVLVEDVHGRQLQWHUQDOUXOHVHVWDEOLVKHGE\WKH%RDUGRI&RUSRUDWH
Auditors, with consideration given to ensuring a balance with remuneration for directors, as well as to market rates for remuneration
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Trust (BBT), a performance-based stock ownership plan for executives, thereby clarifying links between remuneration and degree ofachievement of medium- to long-term operating results targets.
3 Evaluation of the Board of Directors’ Effectiveness
DIC conducts an analysis and evaluation of the effectiveness of the Board of Directors annually via a self-evaluation conducted by the
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recognizes modifying standards related to the Board of Directors and enhancing communications between the Board and executive
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Sustainability Report
Amid rising environmental concerns, including climate change, and increasingly urgent social imperatives, companies today face an ever-morediverse array of challenges. In line with its basic sustainability policy, the DIC Group promotes a variety of sustainability initiatives worldwide
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and advancing its protection, managing risks, and creating value for society through innovation. DIC Group employees will continue
working to deliver the value that its stakeholders—including its customers, suppliers, local communities, shareholders and investors,
and employees—expect, showing ingenuity and a sense of responsibility. The Group itself will strive to remain an organization that
contributes to sustainability for society and the global environment by capitalizing on its businesses to achieve unfaltering growth,
thereby enhancing its own sustainability.

(

)

Basic
themes (B)Business models that respond to social imperatives
New technology development and value creation
Harmony with the community and social contributions
Communication with stakeholders

P47
P48
P49
P50

Environment, safety and health
Quality
Human resources management
Sustainable procurement

P37
P42
P43
P46

Compliance
Risk management
Information security

P35
P35
P36

System for Promoting Sustainability Initiatives
The DIC Group’s system for promoting sustainability initiatives centers on the Sustainability Committee, which answers directly to
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Leveraging its Position as a Global Manufacturer of Fine Chemicals to Support the UNGC
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globally accepted principles in the areas of human rights, labor, the environment and the prevention of corruption.

The 2030 Agenda
for Sustainable Development$WWKH816XVWDLQDEOH'HYHORSPHQW6XPPLWLQ6HSWHPEHU
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Agenda for Sustainable Development,” later summarized
as the Sustainable Development Goals (SDGs), was
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member states. The agenda, which succeeded the
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Group pledges to contribute through its business activities
to the success of the SDGs.

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http://www.un.org/sustainabledevelopment/sustainable-development-goals/

DIC Report 201734

Core and CategorySpecific Themes

Themes that demonstrateunique capabilities (A)Core and category-specific themes
Themes that combine
elements of (A) and (B)Themes that Demonstrate
Unique Capabilities

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which are categorized as basic themes, themes that demonstrateunique capabilities and themes that combine elements of the previous
two classifications. The Group implements a broad range of global
initiatives that take into account its responsibility to ensure proper
product stewardship, as well as its position as a leading manufacturer
RI¿QHFKHPLFDOVIn line with its basic sustainability policy, the DIC Group has
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Sustainability Framework and Themes

WEB

Compliance

http://www.dic-global.com/en/
csr/philosophy/management/compliance.html

Towards Fair and Transparent Corporate Activities
SDGs Goal 16

The DIC Group Code of Business Conduct
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Basic Themes

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Establishing and Operating a Whistle-Blowing System
The DIC Group has established a whistle-blowing system through which one can directly report an issue or question regarding
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Themes that Demonstrate
Unique Capabilities

Risk Management

http://www.dic-global.com/en/csr/
philosophy/management/bcm.html

Reducing Business Risks and Preventing the Recurrence of Incidents

Risk Management Policy
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sustainable implementation RILQLWLDWLYHVLQ-DQXDU\WKH*URXSLQWURGXFHGDQHZO\IRUPXODWHGULVNPDQDJHPHQWSROLF\
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35

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m

e DI

C G ro up

Basic ThemesothGovernance leverages common DIC Group values and mechanisms to create an operating
foundation that allows people on the front lines to focus on their responsibilities.
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environment that inspires pride in each and every employee will help further enhance the DIC Group’s appeal and drive growth.
WEB

Information Security

http://www.dic-global.com/en/csr/
philosophy/management/security.html

Initiatives to Ensure Information Security

Core and CategorySpecific Themes

Hiroyuki Ninomiya
Fr

VOICE

Executive Oﬃcer (In Charge of Finance and Accounting Division)

Initiatives
in Japan,Q¿VFDO\HDUWKH',&*URXSFRQWLQXHGZRUNLQJWRXSGDWHUXOHVIRUDGGUHVVLQJVHFXULW\WKUHDWVDULVLQJIURPFORXGFRPSXWLQJVPDUWGHYLFHVDQGRWKHUHPHUJLQJ,7WHFKQRORJLHV/RRNLQJDKHDGWKH*URXSZLOOSUHVVIRUZDUGZLWKHIIRUWVWRUHYLVHUXOHVWRDFFRPPRGDWHFKDQJHVLQZRUNLQJVW\OHV
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security awareness initiatives targeting employees Groupwide.
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Initiatives in Asia and Oceania
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security measures of DIC Group companies in these regions.
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Initiatives in the Americas and Europe
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LQIRUPDWLRQVHFXULW\ULVNV

Safeguarding Information Security Environments in Asia and Oceania

Revi Septiana RachmantheD

I C G ro u

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Fr o

VOICE

IT Manager, PT. DIC Graphics and Head of the IT Help Desk for Southeast Asia and Oceaniam

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We are working to ensure and enhance information security in Southeast Asia and Oceania.
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DIC Report 201736

Themes that Demonstrate
Unique Capabilities

Globally Maintaining and Enhancing Information Security

WEB

Environment, Safety and Health (ESH)

http://www.dic-global.com/en/
csr/environment/

Toward the Achievement of a Sustainable Society
SDGs Goals 3, 6, 7, 12, 13, 14 and 15

Promoting Responsible Care
Initiatives in Fiscal Year 2016

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ESH Audits

Outline of ESH Audits Implemented (Fiscal Year 2016)
Japan

Audits in Fiscal Year 2016

Core and CategorySpecific Themes

DIC

DIC Graphics

Greater

Other DIC Group companies

ROK

Asia–Pacific region

China(follow-up assessments),Q-DSDQ5HVSRQVLEOH&DUH'HSDUWPHQWVSHFLDOLVWVDXGLW(out of 21)
17companies 3 companies 16 companies
9 sites 4 sites 13 sites
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Total
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sites
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26

36

Principal ESH and Disaster Prevention Initiatives(Fiscal Year 2016)

ESH and Disaster Prevention
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Number of Hands-On Safety Training Participants (Fiscal Year 2016)

Status of Occupational Accidents

Workdays Lost Due to Occupational Accidents (FY2014 -2016)

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DIC Group (Japan))<
&XPXODWLYHWRWDO)<±)UHTXHQF\
rate

504

756

7,990

2,352

10,342

DIC Group (Japan) DIC Group (Global)

2014

2015

2016

2014

2015

2016

2014

2015

2016

0

1

3

4

5

5

80

88

71

0.000 0.181 0.541 0.429 0.556 0.548 2.133 2.375 1.893

6HYHULW\UDWH 0.000
75,5 ※

Total

252

DIC
1XPEHURIZRUNGD\VORVW

DIC Group (overseas)(Greater China: 4 companies;$VLD²3DFLÀFUHJLRQ
2 companies)

0.005 0.012 0.006 0.018 0.026

--

--

--

1.29 1.27 2.35 2.25 2.11 3.07 4.37 4.32 3.84

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Occupational Health
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Manager in charge of safety,
Saitama Plant

Toshiyuki Tanaka

Basic Themes

DIC Wins Special Jury Award in the JCIA’s 2016 Responsible Care Awards

Reducing Discharge of Chemical Substances

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3 Reducing SOx, NOx and COD
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4 Managing Water Resources
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Themes that Demonstrate
Unique Capabilities

Principal Initiatives in Fiscal Year 2016

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4,190

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DIC Group(Japan)

DIC
3,426
4,326

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9,000

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Principal Initiatives in Fiscal Year 2016

7,981

Reducing Industrial Waste

97

metrictonnes183

metrictonnesBasic Themes

97
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DIC Group (Japan)
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Environmental Impact of the DIC Group’s Operating Activities
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HQYLURQPHQWDOIRRWSULQWThemes that Demonstrate
Unique Capabilities

Core and CategorySpecific Themes

Managing Chemical Substances in Products
Promoting the Safety of Chemical Substances and Products
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Preventing Global Warming
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Principal Initiatives in Fiscal Year 2016
1 Formulation of a Medium-Term Target for Reducing CO2 Emissions by Fiscal Year 2020

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CO2 Emissions in Fiscal Year 2016 by Region
Greater China

Results of energy-saving initiatives implemented by the DIC Group
Globalproduction volume

Energyconsumption

CO2 emissions perunit of production+2.4％ +2.5％-2.3％

Asia–Pacificregion19%
Americasand Europe

658,811
metric tonnes

Japan

10%

659,378 +0％
metric tonnes

Breakdown of
CO 2 Emissions in
Fiscal Year
2016

37%

34%

from fiscal year 2015

Fiscal year 2015

Fiscal year 2016

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Themes that Demonstrate
Unique Capabilities

Global CO2 Emissions in Fiscal Year 2016

Core and CategorySpecific Themes

2 Energy Consumption and CO2 Emissions by the Global DIC Group

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CO2 Emission Reductions at Kashima Plant(January–December 2016)
Reduction attributable to use ofwood biomass energy-23,527
Reduction attributable touse of wind powerof CO 2

Reduction attributable touse of solar power
metrictonnesof CO 2-2,308 -49
metrictonnesof CO 2

Reduction in CO2 emissions(January– December 2016)
Basic Themes

metrictonnes-25,884 PHWULFWRQQHV
of CO2

TOPIC

Project Launched at Karawang Plant to Explore the Use of Coconut Shells as an Alternative to
Coal that Will Help Reduce CO2 Emissions
Core and CategorySpecific Themes

基幹〜差別化テーマ
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Karawang Plant boiler

Coconut shells to be used as fuel

Reducing CO2 Emissions by Installing New Solar Panels(Siam Chemical Industry Co., Ltd.)
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Biomass boiler

Hainan DIC Microalgae s
general manager,
Hideyuki Tsuda

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DOORILWVSURGXFWLRQIDFLOLWLHV7KH&RPSDQ\FDSLWDOL]HVRQWKLV406DVZHOODVRQWZRRWKHUPDQDJHPHQWV\VWHPVWRSURPRWHRQJRLQJHIIRUWVWRHQKDQFHTXDOLW\',&¶VTXDOLW\DVVXUDQFHFRQ¿JXUDWLRQGLYLGHVSURGXFWTXDOLW\LQWRWZRIXQFWLRQV3URGXFWTXDOLW\DFURVVWKHHQWLUH',&*URXSZKLFKLVWKHUHVSRQVLELOLW\RIWKH4XDOLW\$VVXUDQFH
'HSDUWPHQWDQGSURGXFWVSHFL¿FTXDOLW\PDQDJHPHQWZKLFKLVRYHUVHHQE\SURGXFWGLYLVLRQTXDOLW\DVVXUDQFHVHFWLRQVWRIDFLOLWDWHSURPSWDQGDSSURSULDWHTXDOLW\PDQDJHPHQW%\
WKXVGLYLGLQJ*URXSZLGHDQGSURGXFWVSHFL¿FTXDOLW\PDQDJHPHQW',&KDVSRVLWLRQHGLWVHOIWRDGYDQFHFORVHFRPPXQLFDWLRQDPRQJWKHVHGHSDUWPHQWVDQGWRVHFXUHSURGXFWTXDOLW\7KH4XDOLW\$VVXUDQFH'HSDUWPHQWLPSOHPHQWVUHJXODUSURGXFWTXDOLW\DXGLWVRI',&*URXSFRPSDQLHVLQ-DSDQWRHQVXUHWKDWTXDOLW\PDQDJHPHQWLVIXQFWLRQLQJHIIHFWLYHO\DVZHOODVWROLIWSURGXFWTXDOLW\OHYHOVWKHUHE\HQVXULQJFXVWRPHUVDWLVIDFWLRQ
1 Initiatives Aimed at Increasing Customer Satisfaction
7RHQVXUHLWVDELOLW\WRSURYLGHKLJKTXDOLW\SURGXFWVWKDWFXVWRPHUVIHHOVHFXUHXVLQJ',&SURPRWHVDYDULHW\RITXDOLW\LPSURYHPHQWLQLWLDWLYHVGXULQJSURGXFWSODQQLQJ
GHVLJQDQGGHYHORSPHQWWKHSURFXUHPHQWRIUDZPDWHULDOVDQGVDOHV0HWLFXORXVULVNHYDOXDWLRQLVFRQGXFWHGDWWKHGHVLJQUHYLHZVWDJHWRJXDUDQWHHVDIHW\
2 New Efforts to Enhance Product Quality-Related Educational Initiatives',&UHFRJQL]HVWKHLPSRUWDQFHRIHQVXULQJWKDWHPSOR\HHVPDLQWDLQDKLJKDZDUHQHVVRITXDOLW\DVZHOODVDFRQVWDQWFRPPLWPHQWWRDFKLHYLQJIXUWKHUTXDOLW\LPSURYHPHQWVDQGXSKROGLQJKLJKTXDOLW\VWDQGDUGV7RWKLVHQGWKH&RPSDQ\SURYLGHVHGXFDWLRQUHJDUGLQJSURGXFWTXDOLW\WRDOO',&*URXSHPSOR\HHVDWVSHFL¿FWLPHVLQFOXGLQJWKURXJKWUDLQLQJIRUWKRVHQHZO\SURPRWHG,Q¿VFDO\HDU',&DOVREHJDQRIIHULQJWUDLQLQJOHGE\H[WHUQDOH[SHUWVLQWKH¿HOGIRUHPSOR\HHVLQYROYHGLQTXDOLW\PDQDJHPHQW7RGDWHDWRWDORILQGLYLGXDOVKDYHSDUWLFLSDWHGLQVXFKWUDLQLQJDIC Report 2017

42

Themes that Demonstrate
Unique Capabilities

Enhancing Product Quality and Customer Satisfaction

WEB

Human Resources Management

http://www.dic-global.com/en/csr/
stakeholder/staff

Working to Enhance Job Satisfaction
SDGs Goals 3, 4, 5, 8 and 10

Respect for Human Rights
The DIC Group supports global codes governing human rights. The DIC Group Code of Business Conduct lays down provisions prohibiting human rights violations
and requiring respect for diversity and mandates voluntary human rights and labor practices inspections. Domestic and overseas Group companies support the
UNGC’s 10 principles, which include tenets regarding human rights and labor. The Company continues to implement related initiatives in all areas of its corporate
activities to reinforce respect for human rights in the human resources management practices of all Group companies and prevent violations from occurring. In
response to the Modern Slavery Act 2015, DIC is reinforcing training regarding supply chain due diligence.

Building Trust with the DIC Employees’ Union

Core and CategorySpecific Themes

Basic Themes

DIC’s management and representatives of its employees’ union meet regularly with the goal of ensuring healthy industrial relations based on mutual trust. In
addition, through labor–management councils and casual management conferences, DIC shares management information and its vision for the future with union
representatives and encourages the frank exchange of opinions. A total of 67.6% of parent company employees belong to the DIC Employees’ Union. (100% of nonmanagerial employees are union members.)

Global Human Resources Management
With the rapid expansion of its global operations, DIC recognizes the importance of fostering human resources and creating an environment that encourages
cross-border career advancement and mobility. To these ends, the Company has sought to further develop harmonized promotion, personnel evaluation and
UHPXQHUDWLRQV\VWHPVWKHFRUQHUVWRQHVRILWVJOREDOKXPDQUHVRXUFHVPDQDJHPHQWIUDPHZRUNIRU',&*URXSFRPSDQLHVXQGHULWVMXULVGLFWLRQ+DYLQJXQL¿HGSHUVRQQHOHYDOXDWLRQV\VWHPVIRUH[HFXWLYHVLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQDVZHOODVFUHDWHGDKXPDQUHVRXUFHVGDWDEDVH',&LVSURPRWLQJ
systematic efforts to cultivate executives, including introducing specialized management training and systematic training programs. Through such efforts, theCompany is striving to create a structure that allows it to cultivate executives that best suit its needs without regard for nationality.

Basic Personnel Statistics(DIC)
Fiscal year 2014
Number of
employees

MaleFemaleTotal

Themes that Demonstrate
Unique Capabilities

Male
Average age

FemaleTotal

Averageyears ofemployment
New
graduates
hired

Male
FemaleTotal
Male
Female
Total

2,876
666
3,542
42.2
39.8
41.7
18.2
17.4
18.1
72
19
91

Fiscal year 2015

2,898
683
3,581
42.2
40.3
41.8
18.2
17.7
18.1
75
20
95

Fiscal year 2016

Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

2,653
660
3,313
41.9
40.6
41.6
17.8
18.5
18.2
38
14
52

(Fiscal year 2011 hires)(Fiscal year 2012 hires)(Fiscal year 2013 hires)

91.2%
100%
92.6%
23
7
30
0.8%
1.1%
0.9%

95.7%
100%
96.5%
37
8
45
1.3%
1.2%
1.3%

Retention
rate (after
three years)

Male

Separations(voluntary)(number ofindividuals)

Male

FemaleTotal
FemaleTotal
Male

Separation rate(voluntary)

Female
Total

91.3%
91.7%
91.4%
32
8
40
0.3%
0.2%
0.3%

1 Ensuring Fair and Consistent Treatment
To ensure that the efforts and achievements of all employees are reflected appropriately in their treatment, DIC has consolidated its numerous employee
TXDOL¿FDWLRQV\VWHPVLUUHVSHFWLYHRIMREFODVVL¿FDWLRQDQGHGXFDWLRQDOFUHGHQWLDOV7KHVHOHFWLRQRIHPSOR\HHVWRUHFRPPHQGIRUTXDOL¿FDWLRQLVGRQHWKURXJKscreening based on objective standards, thereby guaranteeing equal opportunities for promotion to all motivated, capable employees.
Remuneration and personnel evaluation systems designed to enhance job satisfaction ensure that abilities and achievements are assessed appropriately andUHÀHFWHGLQDWLPHO\PDQQHULQWKHLUWUHDWPHQW2IQRWH',&KDVLQWURGXFHGPDQDJHPHQWE\REMHFWLYHV 0%2 LQWRLWVSHUVRQQHOHYDOXDWLRQV\VWHPDJRDOVHWWLQJmanagement tool that promotes both corporate growth and employee development. Results of individual evaluations are fed back in full to employees, including
UHDVRQLQJEHKLQGGHWHUPLQDWLRQV²DWUDQVSDUHQWSURFHVVWKDWHQVXUHVHPSOR\HHVDUHODUJHO\VDWLV¿HGZLWKHYDOXDWLRQUHVXOWV
2 Fostering Human Resources to Reinforce Front-Line Capabilities and Accelerate Change
Having recognized fortifying its Group organizational capabilities and enhancing the skills of its people as important challenges, DIC has declared the medium-term focus ofits human resources development program as being to nurture human resources capable of reinforcing front-line capabilities and accelerating change.
DIC’s training system comprises programs in six categories. These programs are based on curricula that emphasize a systematic approach to helping each employee
acquire critical skills. In fiscal year 2016, training emphasized the concepts of “global” and “diversity,” with training to improve English-language skills expanded andJapanese-language training for non-native speakers and entry-level education for mid-career hires added.
DIC Report 201743

DIC Training Programs
Managementlevel training

Promote globalization, strengthen/foster the ability of management-level
employees to deal with risks

DIC Management School, media training

Global humanresourcesdevelopment

Systematic efforts to foster managers and employees of overseas Group
companies, enhance the skills of Japanese employees assigned tooverseas posts, improve the Japanese-language abilities of employees
who are not native speakers

Global Management (preparatory training for employees assigned tooverseas posts), Global Challenge Program, Target Global Program(training to enhance English-language communication skills), Effective
E-Mailing (training in how to compose e-mails in English), Japaneselanguage training for employees who are not native speakers/HYHOVSHFLÀFtraining

Education and training to equip employees with the skills to fulfill
responsibilities at each level

4XDOL¿FDWLRQVSHFL¿FWUDLQLQJ -06VHQLRU WUDLQLQJWDLORUHGWR
different management ranks

Department- and
MREVSHFLÀFWUDLQLQJ

Education and training to enhance capabilities required by different
departments and jobs

Human resources development programs tailored to production departments(Kaizen Skill Improvement Training Program, others), technical departments(training to support the ability to propose R&D themes, others), sales departments(training to cultivate proposal development capabilities, others) and support
departments (“why-why analysis” training, others)On-the-job training

Hands-on training in the workplace to foster employees and cultivate skills:RUNSODFHVSHFL¿FRQWKHMREWUDLQLQJGRPHVWLFWHFKQLFDOGHSDUWPHQWWUDLQHHSURJUDP2YHUVHDV7UDLQHH3URJUDP*OREDO&DSDELOLW\'HYHORSPHQW3URJUDP

Self development

Support for employees seeking to enhance their skills

Correspondence courses, e-learning courses, in-house seminar courses,
6N\SHEDVHG(QJOLVKFRQYHUVDWLRQFRXUVHVSUHSDUDWRU\FRXUVHVIRUWKH72(,&Institutional Program (IP) Test

Basic Themes

Promoting Diversity
The DIC Group actively pursues diversity by employing a broad spectrum of individuals without regard to considerations such as gender,
nationality, physical limitation or age. The Group works to foster a corporate culture that draws on its understanding and respect for diversity to
produce creative ideas and to incorporate the concept of diversity into management, thereby creating workplaces that enhance job satisfaction.

VOICE

10

Polymer Processing Technical Group 2, Polymer Processing Technical Division, Chiba Plant Jia YingtheD

I C G ro upCore and CategorySpecific Themes

With the objective of securing talented individuals with advanced specialized capabilities, global
perspectives and language capabilities, DIC actively promotes the hiring of international students
completing undergraduate or graduate studies at Japanese universities; Japanese and foreign
nationals completing undergraduate or graduate studies at overseas universities; and experienced
mid-career candidates with extensive experience and expertise. At present, 40 foreign nationals
work in various capacities at DIC. Fiscal year 2016 new hires included 10 foreign nationals.

Number of Foreign Nationals
Employed by DIC in Fiscal Year 2016m

Hiring Diverse Human Resources

Fr o

1

When I began hunting for a job as I was getting ready to graduate, DIC held a recruitment event at my university. I was really impressed by thepleasant atmosphere and by the impression they gave of being emphatically open to hiring foreign nationals. So even though I am not Japanese,
there was no uncomfortable pressure on me because of that when I entered the company. My job is in the area of PPS product development and theprovision of technical services to customers. My responsibilities currently involve performing comparisons with materials produced by competitors and identifying the causesof quality problems. When I first joined the company, I could read and comprehend the content of various forms and documentation I dealt with, but my spoken Japanese was
not so great, so many minute nuances went over my head and I found verbal communication a challenge. My on-the-job training supervisor was so kind and always responded
patiently no matter how many questions I asked! Everyone in my department is friendly, too, so I really enjoy working here. I look forward to increasing not only my language
skills but also my product knowledge, and to playing an active role in PPS product development. (Ms. Ying is originally from Zhejiang Province in the PRC.)

Themes that Demonstrate
Unique Capabilities

I will work to increase my product knowledge with the aim of playing an active role in product development.

2 Expanding Career Opportunities for Women
In line with its commitment to promoting diversity, DIC implements a variety of initiatives to expand career opportunities for female Female Employees in
employees. Since launching a full-scale program with this objective in 2007, the Company has pushed ahead with measures Management Positions
to transform the mindset of all employees and its corporate culture, provide education designed to encourage the drive and
GHWHUPLQDWLRQRIIHPDOHHPSOR\HHVDQGEURDGHQWKHUDQJHRIMREVRSHQWRZRPHQ,Q¿VFDO\HDU',&HVWDEOLVKHGWKH&3 (“CCubed”)* 1 Advisor System, whereby 12 female employees with experience in handling the demands of career and childcare areappointed to advise their juniors who are currently taking childcare leave on ways to maintain an effective balance once they return
WRZRUN,Q¿VFDO\HDUWKH&RPSDQ\KHOGWKH:RPHQLQ',&)RUXPDQHYHQWGHYRWHGWRWKHLVVXHRIFDUHHURSSRUWXQLWLHVIRU
female employees.
As of December 2016 Fiscal year 2020(target)
The Company will continue working to broaden the range of jobs open to women, including studying the introduction of a telework*2
system. Through such efforts, the Company aims to boost the percentage of management positions occupied by female employees, with a％
WDUJHWRIE\¿VFDO\HDU',&ZLOODOVRFRQWLQXHZRUNLQJWRH[SDQGLWVUHFUXLWPHQWRIQHZIHPDOHJUDGXDWHVIURPWHFKQLFDOVFKRROV
and bachelor’s and master’s degree programs, both sources of talented human resources. DIC has also formulated an action plan basedon Japan’s Act on Promotion of Women’s Participation and Advancement in the Workplace.

3.1*1 “C3” represents the three “Cs” in “childcare” and “career.”*2 Telework is a work arrangement that enables employees to work at home or another remote location using ICT, eliminating the time and location
constraints of traditional work arrangements.

DIC Report 2017448％

3 Advancing the Employment of Individuals with Disabilities
DIC is committed to creating inclusive work environments that help individuals
ZLWKGLVDELOLWLHVHQMR\DFWLYHDQGIXOILOOLQJFDUHHUV2QHLQLWLDWLYHZKLFKEHJDQLQ¿VFDO\HDULVDQLQWHUQVKLSSURJUDPRUJDQL]HGLQFROODERUDWLRQZLWKDIDFLOLW\providing support for individuals with intellectual disabilities, designed to transition
into part-time employment. At the beginning of fiscal year 2017, three program
participants were offered clerical positions.
As of December 31, 2016, individuals with disabilities accounted for 2.04% of DIC’s
total labor force, in line with Japan’s legally mandated quota of 2.0%. Going forward,
DIC will continue striving to enhance work environments and increase workplace
DFFHVVLELOLW\ZLWKWKHDLPRIOLIWLQJWKLV¿JXUHWRE\¿VFDO\HDU

2.20%

2.30%

2.20%

（DIC）

2.22%

Percentage oflabor force accounted forby individuals with disabilities
as of March 31, 2016

2.14%
2.10%
2.06%

2.10%

2.04%

2.04%

(Legally mandated quota revised)

2.00%
Percentage oflabor force accounted
for by individuals
with disabilities

1.90%Japan’s legally mandated quota

1.80%

1.70%

11

12

13

14

15

16 (FY)

Initiatives that Support a Healthy Work–Life Balance
DIC views work–life balance as essential to both self-realization and sustainable corporate growth. Believing that greater productivity is key to
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life outside work, creating a positive cycle that yields value-added results.

Themes that Demonstrate
Unique Capabilities

Core and CategorySpecific Themes

Basic Themes

1 Enhancing Programs that Help Employees Balance the Demands of Work and HomeIn 1986, DIC blazed a trail for chemicals manufacturers in Japan by implementing a childcare leave program. Having established work and childcare balance support programs thatexceed legal requirements in 2007, the Company continues promoting measures that make it easier for employees to make use thereof. DIC has also deployed a system that gives
regular employees the option to accept or refuse transfers requiring relocation. In 2012, the Company established a system that allows management-level employees to limit thelocations to which they will accept transfers, making it easier for individuals who are unable to accept transfers that involve relocation because of childbirth, childcare, nursing care orother responsibilities to effectively balance their professional and private lives, reduce overtime hours, encourage the taking of annual paid leave and promote health management.
7RHQFRXUDJHXVHDQGSURPRWHNQRZOHGJHRILWVOHDYHSURJUDPVLQ¿VFDO\HDU',&SXEOLVKHGWKH&KLOGFDUHDQG1XUVLQJ&DUH+DQGERRNWRUHÀHFWUHYLVLRQVWR-DSDQ¶V&KLOG
Care and Family Care Law in 2016. This was followed up with an employee awareness campaign that began in June 2017.
Thanks to the introduction of various systems and the creation of an
Number of Employees Using the Childcare Leave and Leave to Assist with Parenting Programs environment that encourages employees to make use thereof, the percentage
of DIC employees who return to work after taking leave is currently 100%.
In addition, awareness of the Company’s Leave to Assist with Parenting
Fiscal year 2014 Fiscal year 2015 Fiscal year 2016
Program among male employees has risen, underscored by the fact that
Number of employees using
more than 67.4% of eligible employees took advantage of this program in
28
29
35
the Childcare Leave Programfiscal year 2016. Underscored by efforts to enhance these systems, theNumber of employees using
DYHUDJH\HDUVRIHPSOR\PHQWIRUIHPDOHHPSOR\HHVLQ¿VFDO\HDUZDV63
64
62
the Leave to Assist with Parenting Program
18.5 years, exceeding the average for male employees, which was 17.8 years.
2 Reducing Extreme Overwork and Encouraging Employees to Take Annual Paid Leave
DIC has deployed an electronic system to manage on-site hours, working hours and approved overtime hours. As a measure to prevent extreme
overtime, if an employee exceeds the overtime limit agreed to with the employees’ union, his or her supervisor is required to submit a report to
PDQDJHPHQWFRQ¿UPLQJWKHZRUNDQGUHDVRQVIRUWKHORQJKRXUVZKLOHDOVRSUHVHQWLQJVSHFL¿FPHDVXUHVWRDPHOLRUDWHWKHVLWXDWLRQ',&HQFRXUDJHV
employees to take annual paid leave, notably by recommending leave timing at each business site and having employees plan dates for such leave.

Caring for Mental Health
DIC takes steps to create environments in which employees can feel secure and works to ensure that its labor
management practices comply with legal requirements. The Company places a particularly high priority on caring
for psychological and emotional well-being and has established a comprehensive mental health program, engaging
an in-house occupational psychologist, encouraging awareness as a way of warding off mental health problems
and providing support to ensure a smooth return to work for employees taking leave. Access to counseling from an
occupational psychologist has had a particularly positive impact in terms of ensuring employees get treatment andare able to return to work as soon as possible.
',&KDVDOVRRIIHUHGYROXQWDU\VWUHVVFKHFNVVLQFH¿VFDO\HDU/RRNLQJDKHDGWKH&RPSDQ\ZLOOFRQWLQXH
to promote active, systematic efforts with the goal of preventing mental health disorders in accordance with related
OHJLVODWLRQSDVVHGLQ-DSDQLQ¿VFDO\HDU

Kokoro no Kenko (“Psychological
Health”) self-check handbook

Mental Health Initiatives• Guidance from an in-house occupational psychologist HQJDJHGDVDQRFFXSDWLRQDOSK\VLFLDQVLQFH¿VFDO\HDU
• Internal and external help desks• Line-care training* for supervisors• Mental health self-checks as a part of training for new employees• Distribution of Kokoro no Kenko (“Psychological Health”) self-check handbook to all employees• Flexible process to support employees returning to work after taking leave* Line-care training: Training for supervisors to help them recognize promptly when an employee is unwell and respond appropriately by, for example, recommending guidance orcounseling or making workplace improvements.

DIC Report 2017

45

WEB

Sustainable Procurement

http://www.dic-global.com/en/csr/
stakeholder/partner

Ensuring Extended Supply Chain Functions in a Socially Responsible Manner
SDGs Goal 12

The DIC Group CSR Procurement Guidelines❶ Compliance with laws and social norms❷ Respect for human rights and consideration for work environments❸ Safety and hygiene❹ Promotion of sound business management❺ Consideration for the environment❻ Information security❼ Appropriate quality and safety and improved technologies❽ Flexible attitude to ensure stable supplies and respond to change❾ Contribution to local communities and society❿ Promoting CSR and deploying it in the supply chain

DIC has formulated the DIC Group CSR Procurement Guidelines, a series of requirements pertaining to ESG-related imperatives, including themanagement of chemical substances in and reduction of the environmental impact of raw materials, as well as respect for human rights acrossits entire supply chain. With the aim of compelling suppliers to observe these guidelines, the Group conducts assessments and on-site inquiries
in accordance with the DIC Group Supply-chain CSR Deployment Guidebook. (Version 2 of the guidebook was published in July 2013.) These
efforts have proven effective in enabling the Group to reinforce relations with its suppliers.

Cumulative number of suppliers assessed (November 2013–December 2016)

682

358

350
300
250
200

141

150
100

77

50
0

Equivalent to 90%-plus ofprocurement spending

1

45
23 37

2.0 2.0〜2.5 2.6〜2.9 3.0〜3.5 3.6〜3.9 4.0〜4.5 4.6〜5.0

ScoresFeedback sheet

Conducting On-Site Inquiries to Advance CSR

Low

High

Note: Based on DIC’s analysis of questionnaire responses,
91% of suppliers assessed to date scored 3.0 or
higher on the Group’s 5.0-point scale.

)URP¿VFDO\HDUWKURXJK¿VFDO\HDUWKH',&*URXSFRQGXFWHGRQVLWHLQTXLULHVIRUVXSSOLHUV7KHREMHFWLYHRIWKHVHLQTXLULHVLVWRKHOS
suppliers further their understanding of CSR.

Global Procurement Initiatives

Kevin Kem

VOICE

2QVLWHLQTXLU\DWDVXSSOLHULQWKH35&theD

I C G ro u

p

Fr o

In fiscal year 2016, procurement departments in Japan, Greater China and the Asia–Pacific region
collaborated to conduct CSR procurement assessments for and provide feedback to materials suppliersin core businesses. DIC also conducted on-site inquiries for six suppliers in Greater China, working withthese suppliers to fortify their understanding of issues related to local environmental regulations, and ofenvironmental issues in the supply chain related to local legal and regulatory compliance, as well as toimplement corrective actions.

Group Purchasing, DIC (Shanghai) Co., Ltd.

DIC’s efforts to build win–win relationships with suppliers has enabled it to realize sustainable procurement.
My job is in the purchasing of materials for DIC Group companies in Greater China. I have gained extensive know-how in the area of CSR through in-house
WUDLQLQJDPRQJRWKHUVDQGKDYHEHHQDFWLYHO\LQYROYHGLQSURPRWLQJ&65DPRQJVXSSOLHUV2QHRIWKHELJJHVWFKDOOHQJHVKDVEHHQILQGLQJDQHDV\WR
understand way to explain the need for CSR to suppliers, because it is not easy to fully grasp actual initiatives based on responses to supplier self-evaluation questionnaires.
In fiscal year 2016, we conducted on-sight inquires for six suppliers in Greater China. While the standards for these inquiries centered on traditional concerns, namely, quality, costand delivery, we explained to suppliers the need to give consideration to ESG in advance and secured their understanding. We also exchanged opinions with suppliers regarding
CSR initiatives. When we discovered particularly outstanding initiatives being implemented by suppliers, as well as when we felt suppliers’ understanding of CSR fell short, we
introduced DIC initiatives as case studies. This has allowed us to build win–win relationships with suppliers that I am confident will underpin sustainable growth for all concerned
going forward.

DIC Report 2017

46

Core and CategorySpecific Themes

Feedback provided

400

Themes that Demonstrate
Unique Capabilities

From November 2013 through December 2016, the DIC Group conducted assessments for
682 suppliers using version 2 of the DIC Group Supply-chain CSR Deployment Guidebook,accounting for 90%-plus of its procurement spending. The Groupanalyzed and assessed questionnaire responses, providing feedback
WRDOOVXSSOLHUVDQGUHTXHVWLQJFRUUHFWLYHPHDVXUHVIRUVLJQL¿FDQW
issues through on-site inquiries or written comments.

Assessment Distribution Chart (682 Suppliers)

Number of companies

Analyzing the Results of Questionnaires

Basic Themes

Promoting CSR Procurement

WEB

Business Models that Respond to Social Imperatives

http://www.dic-global.com/en/csr/
stakeholder/customer.html

Cultivating Next-Generation Businesses
SDGs Goals 8, 9 and 11

Promoting Businesses that Respond to Future Social Imperatives
One of the central strategies of the DIC Group’s current medium-term management plan, DIC108, is to create next-generation businesses. The Group is responding
to this challenge through the cultivation of business models that address social imperatives.
For example, one of the principal objectives behind efforts to expedite the development of electric vehicles (EVs) is the need to address increasingly crucial issues
such as global warming and the depletion of fossil fuels. However, the practicality of EVs depends on resolving a number of key technological challenges, notably
increasing the capacity of storage batteries and developing new power semiconductors, battery charging devices. The DIC Group conducts tireless research aimed
at addressing such technological challenges, and is developing innovative materials and systems for storage batteries, power semiconductors and sensors, among
others, that will yield concrete, viable solutions, thereby contributing to sustainability. The Group will continue to promote business activities with roots in the needsof society with the aim of further evolving its business models.

Examples of Optimized Business Models that Respond to Social Imperatives
Basic Themes

1 Linablue ® Natural Blue Food Coloring: Contributing to Food Safety
The DIC Group’s health foods business centers on Spirulina, a cyanobacteria rich in vitamins and minerals that contributes to a balanced diet. Spirulina also
absorbs CO2 as it grows, thus helping to reduce CO2 in the air. The Group also produces and markets Linablue®, a Spirulina-derived natural blue food coloring thatis the only natural food coloring approved as safe by regulatory authorities in the United States and Europe, as well as Japan. The Group will continue to actively
promote the expansion of markets for Linablue® as a product that responds to a variety of social imperatives.
2 PASLIM Oxygen–Barrier Adhesive: Keeping Food Fresh Longer

Core and CategorySpecific Themes

With the aim of realizing more functional packaging materials that help reduce food loss and of contributing to the conservation of packaging resources, DIC developed
PASLIM, an adhesive that prevents oxygen permeation. The Company continues to promote the development of packaging materials that improve the barrier properties offood packaging with the aim of extending product shelf life, thereby reducing food loss in distribution, retailing and consumption, and conserving packaging resources.
3 Plastics Products: Safeguarding Lifestyles
In addition to manufacturing and selling a broad range of plastics products in line with its ultimate objective of safeguarding lifestyles, DIC Group company DIC
Plastics, Inc., is an active proponent of environment-friendly business practices, particularly material recycling*. Among the company’s noteworthy achievements is
its development of a system for sorting waste plastics, generated during the manufacture of original products, by type and color, which has enabled the company todiversify its lineup of products made with recycled plastics, increasing the volume of such materials it uses and adding value to the products in which they are used.

Themes that Demonstrate
Unique Capabilities* Material recycling involves the recycling of material from an original application but in a different form.

Anticipating Trends and Promoting Efforts to
Identify and Cultivate Promising New Markets

Sheet-form heat storage material
The secret to a stabletemperature is a
microencapsulated
plant-derived
phase – changematerial(PCM)

Absorbs heat Releases heat CN sheetetStable atapprox.

27
With the aim of realizing sustainable growth over the medium to long term, the DIC Group has
Absorbs heat Releases heat
Microencapsulated
PCM
identified promising new markets arising from social imperatives in six key areas—resources,
LiquidSolidmaterials and energy; logistics and industrial equipment; electronic and electrical equipment;
pharmaceuticals and medical devices; general consumer products; and construction infrastructure—
Absorbs heat at 27ºC
Releases heat at 27ºCor higher
or lowerand is striving to assess its ability to cultivate demand in each. The Group is also working to identify
Microcapsule: Minute sphere with a diameter of 1–100 μm
key technologies, as well as to discern technological issues that must be addressed, allowing it
to accurately gauge growth and technology development potential and determine which of these Sheet-form heat storage material
markets it will enter. Such efforts have demonstrated considerable demand for building materials
WKDWFRQWULEXWHWRPRUHHQHUJ\HI¿FLHQWFRPIRUWDEOHDQGKHDOWK\KRPHV0DWHULDOVWKDWDEVRUEDQGGLVVLSDWHKHDWZRUNWRPDLQWDLQDFRPIRUWDEOHURRPWHPSHUDWXUH
reducing energy used for heating and cooling. One issue with conventional heat storage agents is oozing and leakage when they change from solid to liquid form,
making the incorporation of such agents into building materials a key challenge. DIC has succeeded in leveraging its proprietary technologies to develop a sheetform heat storage material that can easily be laminated together with a variety of building materials. The new material exhibited effectiveness in a demonstration
SURMHFWLPSOHPHQWHGE\WKH1HZ(QHUJ\DQG,QGXVWULDO7HFKQRORJ\'HYHORSPHQW2UJDQL]DWLRQ 1('2 LQ¿VFDO\HDU',&LVFXUUHQWO\LQWKHSURFHVVRIREWDLQLQJ-DSDQ,QGXVWULDO6WDQGDUGV -,6 FHUWL¿FDWLRQDPRQJRWKHUVZLWKDYLHZWRJDLQLQJZLGHPDUNHWDFFHSWDQFH
℃

Global Efforts to Expand Business Domains and Cultivate Next-Generation Businesses
Once it has resolved provisionally to enter a promising new market, the DIC Group sets about clarifying necessary technologies, systems and services, as well as
key development themes. Technology and sales departments work together to verify theoretical value and ascertain the appropriate opportunity to enter the market
and, bearing in mind its position in the supply chain, aim to create an optimal business model that will enable it to provide innovative solutions to its customers and
EXLOGDUREXVWEXVLQHVV7KH*URXSLVWDNLQJDFWLYHVWHSVWRUHLQIRUFHDQGH[SDQGLWVSUHVHQFHLQNH\$VLDQPDUNHWVZKLFKDUHH[SHFWHGWRVHHVLJQL¿FDQWJURZWKgoing forward, focusing particularly on core businesses, while at the same time broadening its reach to include emerging economies in Eastern Europe, SouthAmerica and the Middle East, with the aim of driving further growth.

DIC Report 2017

47

WEB

New Technology Development and Value Creation

http://www.dic-global.com/en/
csr/technology_development.html

Proposing Solutions that Leverage Elemental Technologies
SDGs Goals 9 and 12

Achieving Sustainable GrowthWith the aim of achieving its Color & Comfort by Chemistry management vision, the DIC Group is leveraging its basic technologies, including those in the areasof optics and color, organic molecular design, polymer design and dispersion, as well as its core technologies in such areas as synthesis, compounding andformulation, and surface treatment, to develop high-value-added products. The Group is also building a portfolio of next-generation products and new technologies
by integrating technological resources originating across the Group, as well as actively promoting open innovation, to drive sustainable growth.

6SHFLÀF,QLWLDWLYHVDQG$FKLHYHPHQWVThe DIC Group is promoting the development and use of clean technologies. The Company is encouraging a shift toward materials with reduced environmental
impact—notably energy-saving, water-based and solvent-free materials, as well as materials for the electronics, automotive, packaging and other industries—that
improve the environmental performance of the products in which they are used, which it has positioned as environment-friendly products.

$*OREDO5 '&RQÀJXUDWLRQWKDW8QGHUSLQV3URGXFW'HYHORSPHQW
Global DIC Group

Technical Administrative Division
Technical divisions
Fine Synthesis, Polymer, Adhesives,
Dispersion, Polymer Processing,Coating & Applied Materials

R&D aimed atdeveloping
new products

Qingdao DIC Finechemicals

Product Safety &Regulatory Group
Printing inks technical centers‒
Asia-Paciﬁc/China

Product Innovation Center

Polymer Technical Center ‒Asia-Paciﬁc/China
PPS technical service centers ‒China/Germany

Corporate R&D Division
Core Value Research Center

Investigative
research

Sun Chemical GroupIntellectual
Property Center

Analysis Center

Research aimed atcommercializing
newly developed
products

Basic research

DIC Graphics Corporation
Technology Planning
Department

Core development
Algae Research Center

Advanced Characterization
Research Center

Process Engineering
Research Center

Open Innovation
Promotion Groupetc.

Collaborative research, contracted research,
participation in public research programs, others

Universities and research organizations in Japan and overseas, national projects (Japan)

Promoting Environment-Friendly Products

Takeshi IbetheD

I C G ro u

p

Fr o

VOICE

Assistant Manager, Polymer Technical Group 5, Polymer Technical Division 1m

The DIC Group is committed to effective stewardship of the products it provides. (For related information, please see page 57 of the complete version of the DIC Report.)
Conscious always of the importance of ensuring its products are environment-friendly, DIC promotes the development of products and new technologies that are useful tosociety and works to increase the weighting of environment-friendly products in its portfolio, by reducing the volume of hazardous substances it uses, focusing on products thatare less hazardous and products that facilitate recycling, and realizing safer production processes that generate less waste and use less energy. The Group has established
LQWHUQDOUXOHVIRUGHVLJQDWLQJSURGXFWV³HQYLURQPHQWIULHQGO\´DQGZRUNVWRLQFUHDVHWKHZHLJKWLQJRISURGXFWVWKDWKDYHHDUQHGWKLVGHVLJQDWLRQLQWKHLUSRUWIROLR,Q¿VFDO\HDUHQYLURQPHQWIULHQGO\SURGXFWVDFFRXQWHGIRURIDOOSURGXFWVSXWRXWE\',&DQGVXEVLGLDU\',&*UDSKLFV7KH*URXSDOVRVWULYHVWRPDLQWDLQDVROLGJUDVSRIODZVDQG
regulations in different countries and territories, and of trends in environmental measures—thereby ensuring its ability to design products that comply with diverse regulations
governing the use of chemical substances in different markets—and conducts environmental assessments on a continuous basis.
For printing inks, adhesives and other products used in food packaging, which the Group supplies to customers around the world, the DIC Group has established a global
product stewardship team. The team shares information on regulations and relevant topics from different markets, as well as promotes awareness thereof and provides education.
.QRZOHGJHWKXVJDLQHGLVLQFRUSRUDWHGLQWRSURGXFWGHVLJQDQGXVHGWRSURGXFHFRPSOLDQFHFHUWL¿FDWHVDFURVVWKHVXSSO\FKDLQZKLFKDUHHVVHQWLDOIRUFXVWRPHUVZRUOGZLGH

We are addressing the challenge of developing next-generation technologies from the perspective of chemistry.
With the trend toward ever-higher levels of miniaturization, sharp increases in fabrication processes and costs have become a key
issue for semiconductor manufacturers. DIC’s Corporate R&D Division recently developed a resin that is appropriate for resists
used in nanoimprint lithography (NIL), a technology that shows promise as a next-generation semiconductor fabrication process.
with NIL, control of the unique organic–inorganic hybrid compound structure used facilitates rapid curing and superb etching resistance, significantly
VWUHDPOLQLQJIDEULFDWLRQ:HZLOOFRQWLQXHWROHYHUDJHWKHZHDOWKRIWHFKQRORJLHVZHKDYHDPDVVHGDVDPDQXIDFWXUHURI¿QHFKHPLFDOVWRDGGUHVVQH[W
generation challenges and promote sustainable development.

DIC Report 2017

48

Core and CategorySpecific Themes

Technical
services
R&D aimed at
improvingexisting products

Basic Themes

7KH',&*URXS·V5 '&RQÀJXUDWLRQ

Themes that Demonstrate
Unique Capabilities

The DIC Group’s global R&D bases work as one topromote R&D aimed at realizing new technologies
and products. DIC’s Technical Administrative Division
and Corporate R&D Division cooperate with the R&D
components of DIC Group companies around theworld. These include DIC Graphics Corporation; theSun Chemical Group’s research centers in the UnitedStates, the United Kingdom and Germany; Qingdao DIC
Finechemicals Co., Ltd., which conducts comprehensive
R&D tailored to market needs in the PRC; printing inks
technical centers (Asia–Pacific region and the PRC);
polymer technical centers (Asia–Pacific region and thePRC); and PPS technical service centers (PRC andGermany). In addition, an algae research center in the
United States capitalizes on the Group’s accumulated
expertise as a producer of Spirulina to conduct
comprehensive algae-related research in areas ranging
from cultivation to practical application.

WEB

Harmony with the Community and Social Contributions

http://www.dic-global.com/en/
csr/society/

Adding Color & Comfort to Lifestyles
SDGs Goals 3 and 4

Examples of Recent Initiatives
Visiting Science Lab Program
In line with the Japanese government’s efforts to promote career education initiatives, as well as to help curb
a decline in the popularity of science among children, DIC and DIC Graphics conduct visiting science labs at
public elementary schools. Through this program, which focuses on, among others, experiments in pigment
synthesis and offset printing, the Group seeks to spark children’s interest in science and encourage themto realize the close relationship between science and their everyday lives. The DIC Group’s visiting sciencelab program was nominated and won gold in the 2016 Education Support Grand Prix, sponsored by Tokyobased Leave a Nest Co., Ltd.
Visiting science lab

Themes that Demonstrate
Unique Capabilities

Core and CategorySpecific Themes

Basic Themes

Comment

This is a model for educational support efforts by B-to-B companies
DIC’s visiting science lab program won gold in our 2016 Education Support Grand Prix. DIC’s initiative stood out among nominatedprograms from more than 100 other companies because rather than being an effort centered on advertising potential or boostingsales, it is an initiative that genuinely seeks to contribute to society. This approach earned high marks. Also worthy of praise is
the fact that the program instructors who visit schools in the vicinity of DIC sites are trained researchers who do so as part oftheir regular work duties. Participation in the program is actually factored into employees’ performance reviews. DIC’s view of the
program as a crucial initiative and active steps to position it as such serves as a model for educational support efforts by B-to-B
companies. I look forward to DIC continuing to promote efforts that both support education for the next generation and foster theskills of its own employees.

Representative of the jury,
Education Support Grand Prix
General Manager, Leave a Nest
Education Research Institute

Daigo Fujita

Initiatives Led by the Central Research Laboratories
The Central Research Laboratories offer a variety of programs in such uniquely DIC topics
as synthesis and chromatics to the students of local schools. In October 2016, students
from Seishin Gakuen High School in Ibaraki Prefecture—a Super Science High School*—
were invited to the Central Research Laboratories to participate in a lab lesson on thetheme of “synthesis and craftsmanship.” Led by researchers from the facility, the event
featured experiments and a hands-on lesson on the use of laboratory equipment. The young
researchers who serve as lab instructors also incorporated a career education component,
taking time to talk to students about how they became interested in science and thechallenges and rewards of being a researcher.

Lab lesson for students of Seishin Gakuen High School* A designation awarded by Japan’s Ministry of Education, Culture, Sports, Science and Technology (MEXT) to senior high schools that implement curricula focused on
WKHVFLHQFHVDQGPDWKHPDWLFVWKDWJRHVEH\RQG0(;7¶VRI¿FLDOJXLGHOLQHVZLWKWKHDLPRIIRVWHULQJWKHQH[WJHQHUDWLRQRIWDOHQWHGHQJLQHHUVDQGVFLHQWLVWV

Kawamura Memorial DIC Museum of Art
The Kawamura Memorial DIC Museum of Art, located adjacent to the Central Research Laboratories in Sakura, Chiba Prefecture, was established
LQWRSXEOLFO\H[KLELWZRUNVRIDUWFROOHFWHGE\',&&RUSRUDWLRQDQGLWVDI¿OLDWHV,QWKHPXVHXPFHOHEUDWHVLWVWKDQQLYHUVDU\7KH
museum’s extensive collection spans numerous genres, encompassing works by Rembrandt; Impressionists such as Monet and Renoir; modern
European artists such as Picasso and Chagall; early modern, modern and postwar Japanese artists; and luminaries of late-20th century Americanart, including Mark Rothko, Cy Twombly and Frank Stella. In addition to its standing exhibit from its permanent collection of more than 1,000 major
works, the museum stages special exhibitions several times a year that focus on pertinent literaryworks and other artifacts that evoke the cultural atmosphere at the time works were created tohelp visitors better understand the collection.
Another appealing aspect of the Kawamura Memorial DIC Museum of Art is its location on a
OXVKO\IRUHVWHGKHFWDUHVLWHDOLYHZLWKVHDVRQDOÀRZHUVDQGIROLDJHWKDWKDVEHHQRSHQWRWKH
public since the museum’s establishment. In a move aimed at promoting relations with the local
community and fostering local cultural activities, the museum has established an annex gallery
on the museum site that serves as an exhibition space for local amateur artists and is also madeavailable to elementary and junior and senior high schools in the Sakura area for an exhibition of
local students’ works.
Kawamura Memorial DIC Museum of Art

Matching Gift Program
DIC has a matching gift program whereby it matches the total amount collected through an annual year-end fundraising drive spearheaded by its
employees’ union. Funds raised through the 2016 drive and matching gift program were donated to 20 children’s homes and facilities providing
support for disabled individuals.
DIC Report 2017

49

WEB

Communication with Stakeholders

http://www.dic-global.com/en/
csr/stakeholder/

Promoting Disclosure and Communication
7KH',&*URXSSODFHVDSULRULW\RQFRPPXQLFDWLRQZLWKLWVVWDNHKROGHUVZRUOGZLGHDVRXWOLQHGLQ$UWLFOHRILWV3ROLF\RQ
Corporate Governance.

Article 7 (Ensuring Appropriate Information Disclosure and Transparency)

Communications tools

Opportunities forcommunication● Websites● Product pamphlets● Corporate profile DVDs
● DIC Report● Corporate PR film
● Television advertisements● Sales activities● Participation in

exhibitions

Ties with society

Ties with employees

Ties with the media

Ensure appropriate disclosureand build trusting relationships
with shareholders andinvestors, encouraging both toevaluate DIC as an attractive
investment.

Operate in harmony with thecommunity and build positive
relationships with local
residents that will underpin
the long-term sustainabilityof operations.

Provide workplaces that are
conducive to job satisfactionand enable all employeesWRIXO¿OOWKHLUSRWHQWLDO2YHU
the long term, achieve true
diversity.

Deepen mutual
understanding throughe f f e c t i v e p u b l i c i t y,
advertising and othercommunications efforts.

● Websites● Site reports● &RUSRUDWHSUR¿OH'9'V● DIC Report● Television advertisements● DIC Plaza● Press conferences● Interviews with journalists● DIC Report● Television advertisements● Production facility tours● Participation in projects involving● Labor–management councils● Results presentations● Websites● Press conferences● Quarterly results

announcements●Yuka Shoken Hokokusho(¿QDQFLDOGLVFORVXUHGRFXPHQWUHTXLUHG
of listed companies in Japan)● Shareholder newsletters● &RUSRUDWHSUR¿OH'9'V● DIC Report● Corporate PR film
● Television advertisements● General shareholders’meetings● Results presentations● IR conferences● IR meetings● DIC IR Day

Ties with Customers

collaboration among industrial
concerns, government bodies andacademic institutions● Participation in community events● Environmental monitoring(in-house newsletter)● Intranet● DIC Pocket Book LQKRXVH*URXSGDWD¿OH ● DIC Report● Corporate PR film

● Newspapers● Economic publications● Industry publications

for employees● Presentations on the DIC
Group Code ofBusiness Conduct● Sustainability presentations

Communications in the
Field of Education

Ties with Society

DIC Graphics’ Kansai-region private show
(DICG365)
DIC’s display at the
Itabashi Public Library(Takashimadaira, Tokyo)

6th Chiba Science School Festival

Ties with the Media
Touch Taiwan 2016
$ZDUGFHUWL¿FDWHIURPWKH$OO-DSDQCalendar Competition(2016)

Ties with Shareholders
and Investors

Results presentation (February 2016)

Press conferences
LQÀVFDO\HDU

Interviews withjournalists
LQÀVFDO\HDU

68

108

Ties with Employees

IR Fair (December 2016)

Results presentation for employees(February 2016)

Facility tour for the families of employees(Komaki Plant)
DIC Plazain-house newsletter

DIC Report 2017

50

Core and CategorySpecific Themes

Basic approach

Build trusting relationships. By
incorporating the demands ofcustomers, seek to develop
products that enhance customer
satisfaction.

Ties with shareholders
and investors

Themes that Demonstrate
Unique Capabilities

Ties with customers

Basic Themes

The Company shall ensure transparency and fairness; and in order to gain the correct understanding and trustfrom stakeholders, shall timely and appropriately disclose information relating to matters such as the DIC Group’s
management philosophy, management policies, business plans, financial condition and sustainability activities.

108 Years of Achievement

DIC Group Milestones

1908
Established as

1925

1957

Begins production of organic pigments

Enters the market for helmets andother molded plastic products

Develops production method for organic pigments
and begins production for its own use, the first step inits evolution as a fine chemicals manufacturer.

Kawamura Ink
Manufactory
Established by Kijuro Kawamura
as Kawamura Ink Manufactory;
adopts the dragon as its
product trademark and begins
manufacturing inks.

1940
Dragon product trademark

Commences production ofwater-based gravure inks
Amid wartime restrictions on use of volatile oils, develops
water-based gravure inks—one of several achievementsthat would later facilitate expansion into synthetic resins.

Enters the plastic products business with the aim of becoming an
integrated manufacturer with operations encompassing productionof everything from plastic raw materials to finished products.

1962

Changes Company nameto Dainippon Ink and Chemicals
Embarks on a new chapter in its history by absorbing
Japan Reichhold Chemicals Inc., and changes Company
name to Dainippon Ink and Chemicals Incorporated(DIC).

1952

Makes full-scale entry into thesynthetic resins business
Establishes Japan Reichhold Chemicals Inc., then thesecond-largest joint venture with an overseas firm in thehistory of the Japanesechemicals industry,
and makes a full-scale
entry into the synthetic
resins business.

DIC s previous
corporate symbol

1968
DIC’s founder, Kijuro Kawamura

Commences sales of the
DIC Color Guide ®

Reichhold Chemicals’
San Francisco plant

Launches the DIC Color Guide®, which becomes the defacto standard for color selection in numerous industries,
bolstering recognition of the DIC name.

1915

Commences production of offset printing inks
Becomes one of the first companies to conduct
research in the area of offset printing inks and succeeds
in producing a viable product in only one year.

Diversiﬁes operations by building onbase in printing inks, organic pigments
and synthetic resins

1990

1995

Located in Sakura,Chiba Prefecture,adjacent to the Central ResearchLaboratories; established to exhibit works
of art collected by DIC and DIC Group
companies; now called the Kawamura
Memorial DIC Museum of Art.

Takes an active role in the Responsible
Care movement since the start as one of
74 founding members of the Japan
Responsible Care Council (JRCC);
reinforces efforts to, among others, reduce
negative environmental impact ofoperations and lower energy consumption.

Opens Kawamura
Memorial Museum of Art

1973

Establishes theEnvironment and Safety
Response Department

Actively introduces technologies
from overseas and promotes
further diversification

Creates department under the directsupervision of DIC’s president to oversee
safety and environmental initiatives(today’s Responsible Care Department);
creates Environment and Safety
Management Regulations and Interim
Emergency Countermeasures Department
and begins promoting decisive efforts,
including the implementation of plantsafety inspections.

Declares intention to uphold theprinciples of Responsible Care2006

Becomes signatory to the
Responsible Care Global Charter
Signs the CEO’s Declaration of Support for
the Responsible Care Global Charter,
established by the International Council of
Chemical Associations, as befits its status asa member of the global community of finechemicals manufacturers.

Certification of DIC as Signatory to
the Responsible Care Global Charter

Sustainability Initiatives

Promotes expansion of
printing inks business

DIC Color Guide ®

DIC Report 2017

51

1970

1999

2015

Establishes Crown Zellerbach Packaging Materials Japan
Co., Ltd., in a joint venture with Crown Zellerbach
Corporation of the United States and Nippon Kakoh Seishi
Co., Ltd., and enters the multilayered films business.

Amid rising awareness of environmental issues, develops
Japan’s first organic solvent-free sheetfed offset ink.

In May 2015, completes the reconstruction of its corporate
headquarters—the DIC Building—in Nihonbashi, Tokyo, the role ofwhich was expanded to include oversight of the global DIC Group.

Enters the multilayered films business

Completes reconstruction of corporate
headquarters in Nihonbashi

1999

1973

Acquires Coates, the printing inks
division of France’s TOTALFINAEnters themarket for LCs
Develops revolutionary
h i g h - p e r f o r m a n c e,
long-lasting nematicLCs, commencing its
evolution into one of
the world’s foremost
manufacturers of LCs.

Succeeds in developing 100% soybean
oil-based printing ink

Establishes presence in India, Central and South America
and elsewhere by acquiring the Coates Group fromTOTALFINA S.A., France’s largest oil company.

2008

Nematic LCs

DIC Building

Changes Company nameto DIC Corporation

1986

Acquires the graphic arts materials division of
Sun Chemical Corporation of the United States
Becomes world’s largest
manufacturer of printing
inks in terms of market
share and a leading namein the graphic arts materials
business.

Marks centennial anniversary by changing Company name to
DIC Corporation and adopting a new corporate symbol.

2016

Launches DIC108 medium-term
management plan
Sets forth a growth scenario aimed at realizing sustainable growthand outlines what DIC must do between now and fiscal year 2018.

2016

DIC’s new corporate symbol

Introduces branding program

Sun Chemical’s headquarters

2009

Establishes DIC Graphics Corporation
In October 2009, establishes a joint venture with Dai Nippon Printing
Co., Ltd. subsidiary The Inctec Inc. and integrates its domestic printing
inks business with the printing inks business of The Inctec.

Seeks to advance globalization ofcore businesses and diversify into new areas

Introduces new branding
program based on theGroup’s “Color & Comfort”
brand slogan, which sets
f o r t h t h r e e c o r p o ra t evalues, and in Octobera i r s a new television
advertisement.

Takes steps to advance environmental
protection and expands global presence

Prepares for a new phaseof growth

2010

2014

In December 2010, becomes a participant in
the United Nations Global Compact, with theaim of maintaining its reputation as a socially
responsible corporate entity.

Clarifies its overall policy of achieving sustainability
in a manner that takes into account, among others,
the environment, ecosystems and socioeconomic
issues, and changes the designation used across its
program from “CSR” to “sustainability.”

Changes designation to“sustainability”

In-house poster promoting sustainability initiatives

Joins United Nations
Global Compact

Brand advertisement for television

2007

Launches CSR program
Begins promoting CSR initiatives;
identifies fulfilling its responsibilities as amember of society through its businessactivities and contributing to the evolutionof society as the cornerstones of CSR.

DIC Report 2017

52

2015

Selected for inclusion in the
Dow Jones Sustainability
Indices Asia Pacific Index
Included for the first time in the DJSI
Asia Pacific Index, a global family of
indices for socially responsible investing
and a benchmark of global sustainability.
Included again in 2016.

Third-Party Verification

The DIC Group commissioned SGS Japan Inc. to conduct third-party verification of its data forgreenhouse gas emissions, discharge of industrial waste and number of occupational accidents (including
number of accidents leading to workdays lost).

DIC Report 201753

Financial Report for Fiscal Year 2016
Analysis of Results of Operations
Overview of Operating Results,Q¿VFDO\HDUHQGHG'HFHPEHUWKHHFRQRPLHVRI1RUWK$PHULFDDQG(XURSHFRQWLQXHGWRVHHPRGHUDWHUHFRYHU\,Q$VLDDUHYLYDOZDVVHHQLQWKH35&DQG6RXWKHDVW$VLD&RQGLWLRQVLQ,QGLDUHPDLQHGRQDJHQWOHXSVZLQJ-DSDQ¶VHFRQRP\while still fragile, showed signs of a gradual rally.
,QWKLVHQYLURQPHQWFRQVROLGDWHGQHWVDOHVGHFOLQHGWRELOOLRQQRWZLWKVWDQGLQJILUPVKLSPHQWVRZLQJWRWKH
appreciation of the yen against other major currencies, among others.
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products and cost reductions.
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gain on sales of noncurrent assets.

FY2015FY2016

Change(%)

Change(%)
excluding the impactof foreign currencyÁXFWXDWLRQV

1HWVDOHV





-8.4%

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Operating income







Ordinary income

55.8

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Segment Results

 %LOOLRQVRI\HQ

Net sales

Operating income (loss)

FY2015FY2016

Change(%)

Change(%)
excluding the impactof foreign currencyÁXFWXDWLRQV

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





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

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3RO\PHUVCompounds

FY2015FY2016

Change(%)

Change(%)
excluding the impactof foreign currencyÁXFWXDWLRQV









8.8%

-5.4%

































5.7



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

$SSOLFDWLRQ0DWHULDOV

57.5

55.7











Others, Corporate and eliminations 



—

—

(4.8)



—

—

Total





-8.4%











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Segment results in key markets are as follows. Year-on-year percentage changes in squared parentheses represent
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DIC Report 2017

54

Financial Report for Fiscal Year 2016

 %LOOLRQVRI\HQPrinting Inks
■ Japan

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6DOHVRISDFNDJLQJLQNVEHQH¿WHGIURPKHDOWK\VKLSPHQWV+RZHYHURYHUDOOVDOHVLQ-DSDQVOLSSHGUHÀHFWLQJGHFUHDVHGGHPDQG
for publishing inks and news inks and the erosion of sales prices across the board.
Operating income soared, underpinned by the aforementioned shipments, as well as by the positive impact of cost reductions andan improved product mix, among others.

■ The Americas and Europe

Financial Report for Fiscal Year 2016

1HWVDOHVELOOLRQ&KDQJH

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$PHULFDVDQG(XURSHGHFOLQHG
)RUHLJQFXUUHQF\ÀXFWXDWLRQVDOVRKLQGHUHGRSHUDWLQJLQFRPHZKLFKGHFUHDVHGGHVSLWHEHLQJOHYHOLQORFDOFXUUHQF\WHUPV■ Asia and Oceania

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VKDUSLQFUHDVHLQVDOHVRISXEOLVKLQJLQNVDQGSDFNDJLQJLQNVXQGHUSLQQHGKLJKHUVDOHVLQ6RXWKHDVW$VLD,Q2FHDQLDVDOHVURVH
bolstered by robust shipments of publishing inks and packaging inks. Sales in India slipped, with contributing factors including
IDOOLQJVDOHVRIQHZVLQNV)RUWKHVHDQGRWKHUUHDVRQVRYHUDOOVDOHVLQ$VLDDQG2FHDQLDGHFUHDVHGKDPSHUHGE\IRUHLJQFXUUHQF\ÀXFWXDWLRQVOperating income was up in local currency terms, bolstered by higher sales of high-value-added products, cost reductions andRWKHUIDFWRUVEXWGRZQDIWHUWUDQVODWLRQUHÀHFWLQJIRUHLJQFXUUHQF\ÀXFWXDWLRQV

Fine Chemicals
1HWVDOHVELOOLRQ&KDQJH

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$PHULFDVDQG(XURSHGHFUHDVHGQRWZLWKVWDQGLQJDVXEVWDQWLDOLQFUHDVHLQVDOHVRISLJPHQWVIRUFRVPHWLFVDVDFRQVHTXHQFHRIIRUHLJQFXUUHQF\ÀXFWXDWLRQV6DOHVRI7)7/&VUHFRYHUHGVXEVWDQWLDOO\UHÀHFWLQJKLJKHUVKLSPHQWVIURPDQHZSURGXFWLRQIDFLOLW\
LQWKH35&DQGWKHVWDUWRIIXOOVFDOHVKLSPHQWVIURP-DSDQZKLFKKDGEHHQGHOD\HG:KLOHWKHVHIDFWRUVERRVWHGUHVXOWVLQORFDOFXUUHQF\WHUPVVHJPHQWVDOHVZHUHGRZQDIWHUWUDQVODWLRQRZLQJWRIRUHLJQFXUUHQF\ÀXFWXDWLRQV
Segment operating income advanced substantially, underpinned by an improved product mix, among others.

DIC Report 201755

Polymers
1HWVDOHVELOOLRQ &KDQJH

>@2SHUDWLQJLQFRPH ELOOLRQ &KDQJH

>@Despite generally firm shipments, sales in Japan declined as a result of falling sales prices. Sales overseas were also down,
KLQGHUHGE\WKHGHWHULRUDWLRQRIVDOHVSULFHVDQGE\IRUHLJQFXUUHQF\ÀXFWXDWLRQVDOWKRXJKVDOHVWRFXVWRPHUVLQWKHHOHFWULFDODQG
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Cost reductions and other factors sparked a sharp increase in segment operating income.

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6HJPHQWRSHUDWLQJLQFRPHGHFOLQHGUHÀHFWLQJVHJPHQWVDOHVUHVXOWVDPRQJRWKHUVApplication Materials
1HWVDOHVELOOLRQ&KDQJH

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which were hindered by sluggish demand for products used in smartphones.
Segment operating income fell, with contributing factors including the aforementioned segment sales results.

DIC Report 2017

56

Financial Report for Fiscal Year 2016

Compounds

Consolidated Financial Statements
Consolidated Balance Sheet $VRI'HFHPEHUDQG

（0LOOLRQVRI\HQ）

2015

2016

（7KRXVDQGVRI86GROODUV）*

2016

AssetsCurrent assets
Cash and deposits





1RWHVDQGDFFRXQWVUHFHLYDEOH ² WUDGH







0HUFKDQGLVHDQG¿QLVKHGJRRGV





Work in process







5DZPDWHULDOVDQGVXSSOLHV





Deferred tax assets



84,744

Other





（）（）（）











（）（）（）%XLOGLQJVDQGVWUXFWXUHVQHW







0DFKLQHU\HTXLSPHQWDQGYHKLFOHV





（）（）（）0DFKLQHU\HTXLSPHQWDQGYHKLFOHVQHW







7RROVIXUQLWXUHDQG¿[WXUHV



$FFXPXODWHGGHSUHFLDWLRQ（）（）（）



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



Construction in progress













Goodwill







Software



4,878



Other







Total intangible assets



Investment securities





Deferred tax assets





1HWGH¿QHGEHQH¿WDVVHW







Other





$OORZDQFHIRUGRXEWIXODFFRXQWV（）（）（）

Total investments and other assets







778,857





$OORZDQFHIRUGRXEWIXODFFRXQWV
Total current assets
1RQFXUUHQWDVVHWV
3URSHUW\SODQWDQGHTXLSPHQW

Financial Report for Fiscal Year 2016

%XLOGLQJVDQGVWUXFWXUHV$FFXPXODWHGGHSUHFLDWLRQ$FFXPXODWHGGHSUHFLDWLRQ

7RROVIXUQLWXUHDQG¿[WXUHVQHW

Total property, plant and equipment
Intangible assets

Investments and other assets

Total non-current assets
Total assets* <HQDPRXQWVKDYHEHHQWUDQVODWHGIRUUHDGHUV FRQYHQLHQFHRQO\DWWKHUDWHRIWR86WKHDSSUR[LPDWHUDWHRIH[FKDQJHRQ'HFHPEHU

DIC Report 201757

Consolidated Balance Sheet（0LOOLRQVRI\HQ）

2015

2016

（7KRXVDQGVRI86GROODUV）*

2016

Liabilities
Current liabilities
1RWHVDQGDFFRXQWVSD\DEOH ² WUDGH







Short-term loans payable





Current portion of long-term loans payable





Commercial papers



−

−

Current portion of bonds



−

−

/HDVHREOLJDWLRQV



584



Income taxes payable







Deferred tax liabilities







3URYLVLRQIRUERQXVHV







Other





Total current liabilities





%RQGVSD\DEOH







/RQJWHUPORDQVSD\DEOH







/HDVHREOLJDWLRQV







Deferred tax liabilities

8,555





1HWGH¿QHGEHQH¿WOLDELOLW\





$VVHWUHWLUHPHQWREOLJDWLRQV







Other



Total non-current liabilities











Capital stock





Capital surplus





5HWDLQHGHDUQLQJV





Treasury shares（）（）（）Total shareholders' equity





Valuation difference on available-for-sale securities





44,855

Deferred gains or losses on hedges

（）

（）

（）)RUHLJQFXUUHQF\WUDQVODWLRQDGMXVWPHQW（）（）（）5HPHDVXUHPHQWVRIGH¿QHGEHQH¿WSODQV（）（）（）Total accumulated other comprehensive income（）（）（）1RQFRQWUROOLQJLQWHUHVWV





Total net assets





778,857





Total liabilities
Net assets
Shareholders' equity

$FFXPXODWHGRWKHUFRPSUHKHQVLYHLQFRPH

Total liabilities and net assets* <HQDPRXQWVKDYHEHHQWUDQVODWHGIRUUHDGHUV FRQYHQLHQFHRQO\DWWKHUDWHRIWR86WKHDSSUR[LPDWHUDWHRIH[FKDQJHRQ'HFHPEHU

DIC Report 2017

58

Financial Report for Fiscal Year 2016

1RQFXUUHQWOLDELOLWLHV

Consolidated Statement of Income<HDUVHQGHG'HFHPEHUDQG

（0LOOLRQVRI\HQ）

Financial Report for Fiscal Year 2016

2015
1HWVDOHV
Cost of sales*URVVSUR¿W
Total selling, general and administrative expenses
Operating income
1RQRSHUDWLQJLQFRPHInterest income
Dividends income(TXLW\LQHDUQLQJVRIDI¿OLDWHV)RUHLJQH[FKDQJHJDLQV
Other
Total non-operating income
1RQRSHUDWLQJH[SHQVHVInterest expenses)RUHLJQH[FKDQJHORVVHV
Other
Total non-operating expenses
Ordinary income([WUDRUGLQDU\LQFRPH
State subsidy
Gain on bargain purchase
Gain on sales of non-current assets*DLQRQVDOHVRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHV
Compensation income
Gain on sales of investment securities
Total extraordinary income([WUDRUGLQDU\ORVV/RVVRQGLVSRVDORIQRQFXUUHQWDVVHWV
Severance costs
3URYLVLRQRIDOORZDQFHIRUGRXEWIXODFFRXQWV/RVVRQGLVDVWHU/RVVRQYDOXDWLRQRILQYHVWPHQWVLQFDSLWDO
Impairment loss
/RVVRQUHGXFWLRQRIQRQFXUUHQWDVVHWV
Total extraordinary loss
Income before income taxes and non-controlling interests
Income taxes— current
Income taxes— deferred
Total income taxes
1HWLQFRPH
1HWLQFRPHDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV
1HWLQFRPHDWWULEXWDEOHWRRZQHUVRIWKHSDUHQW

2016（7KRXVDQGVRI86GROODUV）*

2016

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Consolidated Statement of Comprehensive Income <HDUVHQGHG'HFHPEHUDQG
2015
1HWLQFRPH
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2016

2016
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DIC Report 201759

Consolidated Statement of Changes in Net Assets<HDUVHQGHG'HFHPEHUDQG

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DIC Report 2017

60

Financial Report for Fiscal Year 2016

Shareholders' equity
Capital stockFinancial Report for Fiscal Year 2016

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2015

2016

2016

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DIC Report 2017

61

（7KRXVDQGVRI86GROODUV）*

Corporate Data
Headquarters/Branches in Japan
Corporate Headquarters
Headquarters
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel: +81-3-6733-3000

Chiba

Saitama

12, Yawatakaigandori, Ichihara, Chiba 290-8585, Japan
Tel: +81-436-41-4141 Fax: +81-436-43-1059

4472-1, Komuro, Ina-machi, Kita-Adachi-gun, Saitama
362-8577, Japan
Tel: +81-48-722-8211 Fax: +81-48-722-6087

Hokuriku
64-2, Minatomachi-So, Hakusan, Ishikawa 929-0296, Japan
Tel: +81-76-278-2332 Fax: +81-76-278-5354

Branch Ofﬁces

Sakai

Osaka

3, Takasago 1-chome, Takaishi, Osaka 592-0001, Japan
Tel: +81-72-268-3111 Fax: +81-72-268-1705

5-19, Kyutaro-machi 3-chome, Chuo-ku, Osaka 541-8525, Japan
Tel: +81-6-6252-6161 Fax: +81-6-6245-5239

Nagoya7-15, Nishiki 3-chome, Naka-ku, Nagoya 460-0003, Japan
Tel: +81-52-951-9381 Fax: +81-52-962-3591

Tatebayashi
6023, Tobukogyodanchi, Ohshima-cho,Tatebayashi, Gunma 374-0001, Japan
Tel: +81-276-77-2461 Fax: +81-276-77-2468

Laboratories

Kashima18, Higashifukashiba, Kamisu, Ibaraki 314-0193, Japan
Tel: +81-299-93-8111 Fax: +81-299-92-6384

Yokkaichi

Central Research Laboratories
631, Sakado, Sakura, Chiba 285-8668, Japan
Tel: +81-43-498-2121 Fax: +81-43-498-2229

Plants5, Kasumi 1-chome, Yokkaichi, Mie 510-0011, Japan
Tel: +81-59-364-1151 Fax: +81-59-364-1620

Art Museum

Tokyo

KomakiKawamura Memorial DIC Museum of Art

35-58, Sakashita 3-chome, Itabashi-ku, Tokyo 174-8520, Japan
Tel: +81-3-3966-2111 Fax: +81-3-3965-4320

151-1, Nagare, Shimosue, Komaki, Aichi 485-0825, Japan
Tel: +81-568-75-2751 Fax: +81-568-73-4120

631, Sakado, Sakura, Chiba 285-8505, Japan
Tel: +81-43-498-2672 Fax: +81-43-498-2139(Information is as of March 31, 2017.)

Principal Subsidiaries and Affiliates■ Japan
Cast Film Japan Co., Ltd.
DC Katsuya Co., Ltd.
DIC Color Coatings, Inc.
DIC Color Design, Inc.
DIC Covestro Polymer Ltd.
DIC Decor, Inc.
DIC EP Corp.
DIC Estate Co., Ltd.
DIC Graphics Corporation
DIC Interior Co., Ltd.
DIC Investments Japan, LLC.
DIC Kako, Inc.
DIC Kitanihon Polymer Co., Ltd.
DIC Kyushu Polymer Co., Ltd.
DIC Lifetec Co., Ltd.
DIC Machinery & Printer s Supplies, Inc.
DIC Material Inc.
DIC Plastics, Inc.
Hamamatsu DIC Co., Ltd.
Japan Formalin Company, Inc.
KJ Chemicals Corporation
Mizushima Kasozai Co., Ltd.
Nippon Epoxy Resin ManufacturingCo., Ltd.
Oxirane Chemical Corp.
Renaissance, Inc.
Seiko PMC Corporation
SUNDIC Inc.
Techno Science, Inc.
Topic Co., Ltd.
YD Plastics Co., Ltd.

■ Asia and Oceania (Excluding Japan)
Aekyung Chemical Co., Ltd.
Changzhou Huari New Material Co., Ltd.
DIC Alkylphenol Singapore Pte., Ltd.
DIC Asia Paciﬁc Pte Ltd
DIC Australia Pty Ltd.
DIC (China) Co., Ltd.
DIC Colorants Taiwan Co., Ltd.
DIC Compounds (Malaysia) Sdn. Bhd.
DIC Epoxy (Malaysia) Sdn. Bhd.
DIC Fine Chemicals Private Limited
DIC Graphics (Guangzhou) Ltd.
DIC Graphics (Hong Kong) Ltd.
DIC Graphics (Thailand) Co., Ltd.
DIC Graphics Chia Lung Corp.
DIC (Guangzhou) Co., Ltd.
DIC India Ltd.
DIC Korea Corp.
DIC Lanka (Private) Ltd.
DIC (Malaysia) Sdn. Bhd.
DIC New Zealand Ltd.
DIC Pakistan Ltd.
DIC Philippines, Inc.
DIC (Shanghai) Co., Ltd.
DIC Synthetic Resins (Zhongshan) Co., Ltd.
DIC (Taiwan) Ltd.
DIC Trading (HK) Ltd.
DIC (Vietnam) Co., Ltd.
DIC Zhangjiagang Chemicals Co., Ltd.
Guangzhou Lidye Resin Co., Ltd.

Hainan DIC Microalgae Co., Ltd.
Kangnam Chemical Co., Ltd.
Lianyungang DIC Color Co., Ltd.
Lidye Chemical Co., Ltd.
Nantong DIC Color Co., Ltd.
Nantong Shan Kai Ming Ke Trading Co., Ltd.
PT DIC ASTRA Chemicals
PT. DIC Graphics
P.T. Pardic Jaya Chemicals
Qingdao DIC Finechemicals Co., Ltd.
Qingdao DIC Liquid Crystal Co., Ltd.
Samling Housing Products Sdn. Bhd.
Seiko PMC (Shanghai) Commerce &Trading Corp.
Seiko PMC (Zhangjiagang) Corporation
Shanghai DIC Ink Co., Ltd.
Shanghai DIC Pressure-Sensitive
Adhesive Materials Co., Ltd.
Shenzhen-DIC Co., Ltd.
Siam Chemical Industry Co., Ltd.
Sun Branding Solutions (India) Pvt. Ltd.
Sun Chemical (Hai an) Limited
Sun Chemical Holding (Hong Kong) Ltd.
Sun Chemical Trading (Shanghai) Co., Ltd.
Suqian Lintong New Materials Co., Ltd.
Suzhou Lintong Chemical Science Corp.
TOA-DIC Zhangjiagang Chemical Co., Ltd.
Zhongshan DIC Colour Co., Ltd.

Sun Chemical Inks A/S
Sun Chemical Inks Ltd.
Sun Chemical Lasfelde GmbHSun Chemical Ltd.
Sun Chemical N.V./S.A.
Sun Chemical Nyomdafestek Kereskedelmi
es Gyarto KFT
Sun Chemical Osterode Druckfarben GmbHSun Chemical Oy
Sun Chemical Pigments S.L.
Sun Chemical Portugal-Tintas Graﬁcas
Unipessoal Ltda.
Sun Chemical Printing Ink d.o.o.
Sun Chemical Publication A.E.
Sun Chemical Publication Romania S.R.L.
Sun Chemical Publications Bulgaria EAD
Sun Chemical S.A.U.
Sun Chemical S.A.S.
Sun Chemical (South Africa) (Pty) Ltd.
Sun Chemical s.r.l.
Sun Chemical, s.r.o.
Sun Chemical, s.r.o.
Sun Chemical Sp. z.o.o.
Sun Chemical Turkey
Sun Chemical Ukraine Ltd.
Sun Chemical ZAOSun Inkjet Ceramics, S.L.

■ Europe and Africa

Benda-Lutz Corporation
Camus Water Technologies LLC
Coates Brothers (Caribbean) Ltd.
DIC Imaging Products USA, LLC
DIC International (USA), LLC
Earthrise Holdings Inc.
Earthrise Nutritionals, LLC.
Inmobiliaria Sunchem, S.A. de C.V.
Mondis Manufacturers Insurance
Company N.V.
New England Manufacturers
Insurance Corp.
Rycoline Products, LLC
SC Funding LLC
SC (Puerto Rico) Ink
Sinclair International Inc.
Sinclair S.A.S.
Sinclair Sun Chemical Ecuador S.A.
Sun Chemical (Chile) S.A.
Sun Chemical Corporation
Sun Chemical de Centro America, S.A. de C.V.
Sun Chemical de Panama, S.A.
Sun Chemical do Brasil Ltda.
Sun Chemical Inks S.A.
Sun Chemical Ltd.
Sun Chemical Management, L.L.C.
Sun Chemical of Michigan LLC
Sun Chemical Peru S.A.
Sun Chemical S.A. de C.V.
Tintas S.A.S.
Wiseman International Co., Ltd.

Benda-Lutz Skawina Sp. z.o.o.
Benda-Lutz Volzhsky ooo
Benda-Lutz Werke GmbH
Coates Brothers (East Africa) Ltd.
Coates Brothers (West Africa) Ltd.
Coates Screen Inks GmbHDIC Europe GmbHDIC Holdings Austria GmbHDIC Holdings B.V.
DIC Performance Resins GmbHECG Holdings Ltd.
Gibbon FineCal Ltd.
Glenside Properties Limited
Hartman D.O.O.
Hartmann Druckfarben GmbH
Hartmann-Sun Chemical EOOD
Kingf isher Colours Ltd.
Lorilleux Maroc S.A.
Parker Williams Design Ltd.
Sun Branding Solutions Ltd.
Sun Chemical AB
Sun Chemical AG
Sun Chemical AG (S.A., Ltd.)Sun Chemical A.O
Sun Chemical A/SSun Chemical A/SSun Chemical B.V.
Sun Chemical d.o.o.
Sun Chemical for Graphic Arts S.A.E.
Sun Chemical GmbHSun Chemical Group Coöperatief U.A.
Sun Chemical Group S.p.A.
Sun Chemical Holding B.V.

■ North, Central and South America(Information is as of March 31, 2017.)

DIC Report 201762