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

MissionVisionVisionSpiritSpiritColor & Comfort by Chemistry

Drive, Integrity, Dedication, Collaboration, Harmony

Making it Colorful
DIC helps make life colorful

Innovation throughCompounding
DIC brings innovation to society through its corecompounding technologies

Specialty Solutions
DIC draws on its expertise and comprehensive
strengths to offer solutions

Contents
CoQQeFWLQJ Whe DIC Group aQG LWs 6WaNeholGers

DIC Group CoPPuQLFaWLoQs Tools
The DIC Group uses a variety of tools to promote communication withits many stakeholders to encourage greater awareness of the Group’s
activities. More detailed sustainability-related information and data canbe found on the DIC website.

PrLQWeGPD)î)orP PublLFaWLoQs

Reports on activities
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The DIC Group: A Global Powerhouse3)LQaQFLal aQG 1oQÀQaQFLal IQIorPaWLoQ

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The DIC Group·s ApproaFh Wo 9alue CreaWLoQ

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19)LsFal <ear  DIC Group TopLFs

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The DIC Group·s %usLQess PorWIolLo
Packaging & Graphic
Color & Display
Functional Products

23
25
27

ProGuFW DeYelopPeQW DesLJQeG Wo CreaWe 1ew 9alue
Water-Based Flexo Ink for Flexible Packaging (Marine Flex)
Water-Based Water- and Oil-Resistant Coating Varnish (HYDRECT)

29

Special Feature

Summary integrated
report (published annually)(printed publication)

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

Report on resultsof operations and¿QDQFLDOFRQGLWLRQ
(published annually)(PDF-form publication)

30
35

Topic

DIC Global :ebsLWe

Sun Chemical developed SunColorBox, a unique setof tools and services

Real-time informationWEB

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

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

AbouW WhLs 5eporW
In previous years, the DIC Group published a combined corporate
profile and sustainability report with the aim of presenting a clear,easy-to-understand picture of the Group and its sustainability
initiatives. Since 2018, the Group has published the DIC Report as anintegrated report, which combines ¿nancial information, encompassing
consolidated operating results and corporate strategies, andnon¿nancial (sustainability) information. The Group has published asimpli¿ed summary version of the report (printed), which focuses on
key highlights, and a more detailed complete version (PDF), whichcontains extensive quantitative data.
WEB

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39

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48

2YerYLew oI 6usWaLQabLlLW\

50

0aWerLalLW\ AQal\sLs

53

Compliance
BCM and Crisis Management
Information Security

54

Environment, Safety and Health (ESH)
Quality
Human Resources Management
Sustainable Procurement

64

Business Models that Respond to Social Imperatives
New Technology Development and Value Creation
Harmony with the Community and Social Contributions
Communication with Stakeholders

DIC 5eporW CoPpleWe YersLoQ PD)IorP publLFaWLoQ

http://www.dic-global.com/en/csr/annual/
Note : $s used herein, the term ³$sia-Paci¿c region´–a geographic designation that, like ³Europe and the $mericas´ and³Greater China,´ represents a grouping of companies overseen by a regional headquarters²refers to $sia (excluding
Japan and Greater China) and Oceania. The term ³$sia and Oceania´ refers to $sia (excluding Japan) and Oceania.

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

6Fope oI 5eporWLQJIn 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_2019.pdf

38

56
62

112
115
131
134
137
140
144

DIC 5eporW  aQG Whe G5I 6WaQGarGs

150

ThLrGParW\ 9erLÀFaWLoQ

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DIC Group 0LlesWoQes

156

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Fiscal year 2018 (January 1–December 31, 2018)

CoYer DesLJQ

DaWe oI PublLFaWLoQ

The cover of this year’s DIC Report derives its
inspiration from the DIC Group’s ³Color & Comfort´brand slogan, employing bright colors that evoke
the efforts of the Group, a global powerhouse, toenrich and add vibrancy to society and the lives ofpeople everywhere.

June 2019 (The next report is scheduled for publication in June 2020.)

GuLGelLQes 5eIereQFeG
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 GRI Standards.
DIC Report 20192

The DIC Group: A Global Powerhouse
Net Sales

Corporate Data
Registered name:

Number of subsidiaries
and affiliates:(

174 Domestic: 32
Overseas: 142

805.5

789.4

400

751.4

600

820.0

Date of foundation:
Date of incorporation:
Paid-in capital:
Number of employees:

800

DIC Building, 7-20,
Nihonbashi 3-chome,
Chuo-ku, Tokyo 103-8233,
Japan
February 15, 1908
March 15, 1937
¥96.6 billion
20,620(Nonconsolidated: 3,290)830.1

Corporate headquarters:(Billions of yen)

1,000

’14 ’15’16’17 ’18（FY）

200
0Operating Income(Billions of yen)

60

)

50

48.4

’14

’15 ’16 ’17 ’18（FY）

20

56.5

51.1

Note: Corporate data is as of December 31,
2018. Net sales and operating income
are for fiscal year 2018.

41.1

30
Corporate headquarters (Tokyo)

54.2

40

10
0

Sun Chemical Corporation
headquarters (United States)

Global Network
DIC has 174 companies in 64 countries andterritories around the world.

Europe
pe
pe

52

Asiaa

14

32

55

North
America
North, Central andSouth America
Sun Chemical Group and others

Japan

Europe and Africa

Net sales¥136.1billion

Operating income¥4.4 billion

Japan

Sun Chemical Groupand others

Net sales¥186.0 billion

Operating income

DIC Corporation, DIC Graphics
Corporation and others

5

Net sales¥11.5 billion
Asia and Oceania

AfricaAf
A
ffriccaa
fri¥318.5 billion

2

Operating income¥26.3 billion(Excluding Japan)

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

Net sales¥164.9 billion

Operating income

Oceania
Oceani
O
Oce
Oc
ccean
cea
eean
eaani
ania
ia

¥11.9 billion

DIC (China) Co., Ltd. (PRC)14

DIC Asia Pacific Pte Ltd (Singapore)

DIC Report 20193

Central and SouthAmerica

Breakdown of Fiscal Year 2018 Net Sales by Segment

Breakdown of Fiscal Year 2018 Operating Income by Segment

Functional
Products

Functional
Products

33.5%￥805.5billionColor &
Display

37.3%

Packaging &Graphic

51.7%

￥48.4
billion

Packaging &Graphic

35.7%

Color &
Display

14.8%

26.9%

Note: Fiscal year 2018 net sales and operating income as used here include intersegment transactions. For this reason, and because of the existence of transactions classified as “others,”
which are not attributable to reportable segments, these figures differ from reported net sales and operating income.

Breakdown of Fiscal Year 2018 Operating Income by Region

Breakdown of Fiscal Year 2018 Net Sales by Region
Asia and Oceania

Asia and Oceania

20.5%

22.0%

North, Central andSouth America￥805.5billion

16.9%

North, Central andSouth America

Japan

39.5%

￥48.4

8.2%

Europe and Africa

Europe and Africa

23.1%

21.2%

billion

Japan

48.6%

Note: Operating income as used here includes eliminations (approximately ¥5.8 billion). Accordingly, these percentages do not represent shares of reported operating income.

Principal Global R&D Sites
Printing Inks
Technical Center—
China

Cincinnati (United States)

Polymer Technical Center —China
Qingdao DIC Finechemicals(PRC)

Rochdale(United Kingdom)

St. Charles (United States)
Midsomer Norton(United Kingdom)
Fine Chemical
Technical Center—Korea

Gallarta(Spain)Eurolab(Germany)

Solid Compound
Technical Center
Asia Pacific (Malaysia)

Central ResearchLaboratories (Japan)

Pigment Technical Center
Asia Pacific (Indonesia)
Polymer Technical Center —Asia Pacific (Thailand)

Printing Inks Technical Center–
Asia Pacific (Thailand)

DIC Report 20194

DIC/Earthrise Algae ResearchCenter (United States)

Carlstadt (United States)

Financial Information

Net Sales, Operating Income and Operating Margin
Net sales

Operating income

Cash Provided by Operating Activities and Free Cash Flow

Operating margin (%)

Net sales(Billions of yen)

900

Cash provided by operating activities
Free cash flow

(Billions of yen)

830.1

820.0

800
700

6.2%

805.5

789.4

751.4

70

Operating income(Billions of yen)

62.5

80

60

54.2

7.2%

70

6.0%

7.2%

50

51.0

46.4

60

600

40

4.9%
500

50

400

40

300

30

29.1

30

30.3

20

19.1

19.0

200

51.1

41.1

54.2

56.5

20

48.4

100

10

0

0

10

12.6

0
2014

2015

2016

(FY)

2018

2017

-4.7

-5
2014

2015

2016

2017

(FY)

2018

* Owing to an investment of ¥2.9 billion in Taiyo Holdings Co., /td., cash used in investing
activities increased in ¿scal year 201.

Net Income Attributable to Owners of the Parent and ROE

Capital Expenditure and Investment

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

70

(Billions of yen)

62.4

50

60

40

38.6

37.4

50

34.8

32.0

（%）
30

30

40

45.1
36.3

25.2

34.0

32.1

30
20

20

14.6
11.3

13.0

12.9

20

10.4

10

10
10

0

2014

2015

2016

2017

2018

(FY)

0

0
2014

2015

2016

2017

2018

(FY)

* Owing to an investment of ¥2.9 billion in Taiyo Holdings Co., /td., capital expenditureand investment increased in ¿scal year 201.

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

Net Assets, Interest-Bearing Debt and D/C Ratio*
Interest-bearing debt

Net assets

Interim dividend

D/C ratio (%)

Year-end dividend

Payout ratio (%)（%）
40(Billions of yen)

36.9

400

35

（%）
70
300

27.3
274.2

265.7

259.5
200

49.8

60

264.5

241.3

47.2

(Yen)

50

44.0

43.6

44.7

276.7

289.9

307.0

344.0

20.5

40

327.3

80
60

20
10

2014

2015

2016

2017

2018

(FY)

0

Debt-to-capital (D/C) ratio: Interest-bearing debt / (Interest-bearing debt  Net assets)

125

60

65

40

10

60

2014

40

40

2015

2016

60

60

5

2017

2018

(FY)

Figures have been adMusted to reÀect the impact of the consolidation of shares.
(In ¿scal year 201, DIC purchased and retired treasury shares.)

DIC Report 2019

5

20
15

30
30

0

120
100

100

50

0

25

22.4

150

30
100

30

29.4

0

Non¿nancial Information
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)
Energy consumption

CO 2 emissions per unit of production(Metric tonnes)

1,000,000（Thousands of GJ）

400

14,000900,000

6.000

5.343

700,000

657,000305
659,000

311
659,000

12,000296

289

635,000

618,000

600,000

300

11,000

5.360

5.144

13,000316

800,000

Energy consumption per unit of production（GJ/metric tonne）(Kg CO2 /metric tonne)

11,127

11,100

5.155

5.104

11,053

10,9025.000

11,37910,000

4.000

9,000
8,000

500,000

200

3.000

7,000
6,000

400,000

5,000

300,000

2.000

4,000

100

3,000

200,000

1.000

2,000

100,000

1,000
0

0
2014

2015

2016

2017

0

(FY)

2018

2014

* CO2 emissions per unit of production is calculated using adMusted production volume (parent
company in Japan only). (Noti¿cation submitted to Japan’s Ministry of Economy, Trade and Industry)

2015

2016

2018 (FY)20170* Energy consumption per unit of production is calculated using adMusted production volume (parent
company in Japan only). (Noti¿cation submitted to Japan’s Ministry of Economy, Trade and Industry)

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

Occupational Accident Frequency Rate (DIC Corporation)

（%）

100

(Rate)

DIC

1.50

90

Subsidiaries in Japan

80

1.00

70
60

52%

53%

56%

57%

56%

0.50

50
40

0.00

30

2010

20

2012

2013

2014

2015

2016

2018 (FY)2017

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.

10
0

2011

2014

2015

2016

2017

2018

Frequency rate ＝(FY)* Owing to the introduction of a new S$P enterprise resource planning (ERP) systemin ¿scal year 201, the method used to calculate environment-friendly products has changed.

Number of deaths or injuries due to occupational accidents
Total work hours

× 1,000,000

A frequency rate of 1.00 means one occupational accident resulting in workdays lost in one year
at a site with 500 employees.

Average Years of Employment (DIC Corporation)

Female Employees in Management Positions (DIC Corporation)(Number of people)

50

Male employees(Years)

6

41

Average years of employment in fiscal year 2018
Male employees:

（%）

48

Female employees

540

18.4 years Female employees:19.7 years Overall:18.6 years

5.1%
33

25

4.4%
30

20

3.7%

24

15

20

4

28
3

3.1%

20
2.6%

2

2.2%

10

10
1

5
0
1994

2010 2011 2012 2013 2014 2015 2016 2017 2018

0

(FY)

DIC Report 2019

6

2014

2015

2016

2017

2018

2019

(FY)

0

A Message fromthe President

Addressing Social Imperatives
as We Work to Reposition DIC
on a Growth Trajectory
Future vision:“Become a unique global company
that is trusted by society
by providing value (safety andpeace of mind, color and comfort)”
Representative Director,
President and CEO
DIC Corporation

Kaoru Ino

DIC Report 20197

In February 2019, we celebrated DIC’s 111th anniversary. In addition to commanding the top share of the global market for printing
inks, a core business since our establishment, we have succeeded in growing pigments and polymers, both derived from printing inks,
into prosperous components. Today, we provide indispensable products and services to customers in a broad range of industries,
including packaging, housing, automotive, cosmetics, electronics and healthcare.
The DIC Group comprises 174 companies in 64 countries and territories. Approximately 60% of our consolidated net sales are
generated by, and over 70% of our more than 20,000 Group employees are located at, bases outside of Japan. Accordingly, a global
perspective is crucial to any discussion of the Group.
In recent years, the rapid spread of advanced digital technologies, as represented by the increasing importance of artificial
intelligence (AI) and the Internet of Things (IoT), have brought dramatic changes to lifestyles and society, as well as to the businessenvironment. At the same time, social imperatives related to concerns such as climate change, food safety and marine plastics havebecome increasingly urgent. Amid such signi¿cant changes, how do materials manufacturers contribute to society going forward"
Since taking the reins as CEO, I have seen this as my principal mission. Ensuring an accurate grasp of global, dynamic paradigm
shifts is essential to our ability to achieve sustainable growth and also to enhance our intrinsic value. This recognition underpinned theformulation of our new medium-term management plan, DIC111, which kicked off in ¿scal year 2019. Under this plan, we will work tostrengthen our business, ¿nancial and human resources strategies while taking steps to improve management ef¿ciency and strength.

| A /ook Back at DIC108 (Fiscal Years 201²2018)
Our previous medium-term management plan, DIC108, was positioned as the ¿rst phase in a growth scenario developed to guide the
DIC Group’s evolution through to ¿scal year 2024. The plan centered on two core policies: Ensure the sustainability of businesses withstable earnings bases—e.g., printing inks, pigments and polymers—by responding to environmental concerns, promoting rationalizationand making strategic investments, and create business models that address social imperatives in such areas as electronics, packaging,healthcare and decarbonization. In line with these policies, we focused on strengthening our technology development capabilities andbusiness expansion efforts, as well as our ¿nancial base. As a consequence, both businesses with stable earnings bases and growthbusinesses reported steady results over the three years of the plan, underpinning record-high income in ¿scal years 2016 and 2017.
However, in ¿scal year 2018 consolidated operating income declined 14.3%, to ¥48.4 billion, despite a 2.0% increase in consolidated net
sales, to ¥80. billion. The principal factors behind this are the fact that efforts to revise product prices failed to keep pace with rising raw
materials prices and the depreciation of currencies in European emerging economies. Consolidated ordinary income decreased 14.%,to ¥48.7 billion, and consolidated net income attributable to owners of the parent fell 17.0%, to ¥32.0 billion. Nonetheless, we declareda full-term dividend of ¥12 per share, an increase of ¥.0 from ¿scal year 2017, as a consequence of which our dividend payout ratio
exceeded 30.0% in the ¿nal year of DIC108.
As demonstrated by our performance in fiscal year 2018, our profitability relies heavily on existing core businesses, meaning thatour business structure is vulnerable to macroenvironmental conditions, including rising prices for raw materials. This underscored ourrecognition of the urgency of transforming our business portfolio so that it’s able to withstand demand declines in mature markets andrepositioning DIC on a growth trajectory by creating new businesses with the potential to become mainstays. It also clari¿ed what we needto do as we move toward this new growth trajectory.
In ¿scal year 2019, risks arising from economic trends in the People’s Republic of China (PRC) and worldwide—a consequence of trade
friction between the PRC and the United States—and from ¿nancial market Àuctuations attributable to the United Kingdom’s withdrawal
from the European Union continue to warrant caution. Nonetheless, we will continue working to revamp our business structure, reinforcing
its ability to withstand macroenvironmental changes and drive continuous, robust growth while at the same time applying our inherent
talent for resolving issues to our efforts to implement the strategies of DIC111. Our forecasts for the period include consolidated net salesof ¥80.0 billion and consolidated operating income of ¥2.0 billion, up .% and 7.%, respectively, from ¿scal year 2018.
Consolidated operating income reached record highs in two consecutive years (Àscal years 201 and 201),
but was signiÀcantly below our original target in Àscal year 2018, owing to rising raw materials prices
Achievements• Reorganized production system in line with demand trends in mature markets (publication inks and polymers)• Growth in functional pigments business exceeded target• Strengthened foundation of electronics business through capital and business alliance with Taiyo Holdings Co., Ltd.
• Realized continuous growth in net sales and record-high income (fiscal year 2017)• Dividend payout ratio exceeded target, thanks to efforts to maintain/improve financial balance
Challenges• Reform business structure to offset further demand declines in mature markets (publication inks and general processed products)• Establish robust business foundation that is impervious to fluctuations in raw materials prices, taking into
account the decline in profitability in fiscal year 2018, a consequence of rising raw materials prices• Create new mainstay businesses to compensate for shrinking demand for publication inks to reposition DIC on a growth trajectory• Steadily implement strategic investments

DIC Report 20198

Promoting business portfolio transformation and an improved management infrastructure with the aim of achieving
consolidated net sales of 10 trillion in fiscal year 202
| Realigning Businesses by Illuminating the Relationship Between Social Value and Economic Value
As a ¿rst step in formulating DIC111, we recon¿rmed our vision for the DIC Group in the future.
Become a unique global company that is trusted by society by providing value (safety and peace of mind, color and comfort)

DIC’s future vision

Two strategies for businessportfolio transformation

Social value● A company that possesses a wide range of global
No. 1 businesses that evoke our distinctive “Color &Comfort” brand slogan

Target Areas• Sustainability• Contribution tomarkets● A company that realizes corporate value throughthe promotion of diversity, thereby earning respect
and admiration from the global community

Economic value• Growth• Profitability• Capital efficiency● A company that works with employees, customers
and shareholders to create value and build an evenmore attractive DIC brandTo ensure that we realize this vision, we established the Intrinsic Value Working Group, comprising mid-tier and young employees,
through which we promoted extensive debate and discussion aimed at better de¿ning the value that DIC provides to society, identifying
the challenges we must address and determining how best we can contribute to further sustainability through our operations. This process
led us to review existing businesses from the twin perspectives of “social value” and “economic value” and to advance business portfoliotransformation in a manner that addresses key imperatives arising from social changes such as the spread of digitization and environment,
safety and health (ESH)-related issues, including those affecting the global environment and food supplies.
Leveraging our position as a manufacturer of ¿ne chemicals, we have sought consistently to provide functionality and added value tosociety in a multitude of forms, thereby helping make people’s lives more convenient. We have also always maintained an awareness ofthe negative aspects of our operations, including the impact of our production activities on the environment. Going forward, we will further
advance this approach with the goal of becoming an organization capable of delivering increased functionality and other features that
improve convenience and of providing social value, one facet of which is environmental value. We will bolster efforts to help address ESHrelated issues—including climate change, sustainable resource use and human health—through our operations to provide enhanced valuethat contributes to a richer, more vibrant society. Combining economic value with social value will enable us to realize sustainable growth
for the DIC Group. A natural extension of this approach is the milestone performance targets we have set for ¿scal year 202, namely,
consolidated net sales of ¥1.0 trillion, operating income of ¥100 billion and net assets of ¥00 billion. Recognizing the achievement ofthese targets as critical to becoming a unique global company that is trusted by society, over the three years of DIC111 we will emphasize
advancing qualitative reforms in existing businesses and commercializing new businesses, and on accelerating disruptive growth throughstrategic mergers and acquisitions (M&As).

140.02025 Targets(Trillions of yen)

DIC102

DIC105

DIC108

DIC111

120.0“Shift from a product-specificto a market-focusedmanagement approach”“Business domains”“Growth scenario”“Business portfoliotransformation”

100.0

Recover from the2008 financial crisis

Restructure printing
inks business andexpand businesses
that will drive growth

Improve profitability,
particularly in businesses
that will drive growth

Reposition DIC on a
growth trajectory throughbusiness portfoliotransformation

80.0

Net sales ¥1.0
Operatingincome ¥0.1
Net assets ¥0.5

14.0%
12.0%

¥70 billion level

60.0

8.0%

¥45 billion level

Business Portfolio
Transformation¥37 billion level

40.0

10.0%

¥61 billion level¥53 billion level

Operating margin

Operating income (Billions of yen)

Reposition DIC on a growth trajectory through business portfolio transformation

52.0

60.0

70.0

20.0

6.0%

• Qualitative reforms
in businesses• Commercialization of
new businesses• Disruptive growththrough strategic M&As

4.0%
2.0%

Operating margin

0.0%

0.0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

DIC Report 2019

9

2019

2020

2021

2025

1

Reorganization of business segments

Effective from fiscal year 2019, we have reorganized our five existing businesssegments, shifting our focus to value provided, into three new segments: Packaging &Graphic, Color & Display and Functional Products. As a company that provides complex
products to customers in a broad range of industries, we often hear from investors thatthey ¿nd it dif¿cult to understand our corporate direction. In that sense, I believe that it’s
important for us to have a business structure and message that are simple and easy forexternal stakeholders to understand and at the same time to ensure that all employees
are on the same wavelength as we work together to confront challenges ahead.

● Packaging & Graphic
Packaging materials that bring safety
and peace of mind
● Color & Display
Color and display materials thatmake life colorful● Functional Products
Functional products that add comfort

Packaging & Graphic
To date, we have pursued independent strategies for printing inks, coextruded multilayer¿lms and adhesives. Grouping these businesses together under the heading “packaging”
will bring together common issues such as food safety and food loss. Looking ahead,
we will capitalize on our ability to provide printing inks, ¿lms and adhesives to marshal
technologies and know-how to offer packaging materials that bring safety and peace ofmind and promote the expansion of our business while at the same time helping resolve
social imperatives.
Presentation introducing DIC111

Color & Display
This segment focuses on pigments, liquid crystals (LCs) and natural colorants as businesses that make life more colorful. In the area of
pigments, we see products for cosmetics as particularly promising. We also expect growth in the market for Linablue®, a natural blue foodcoloring derived from Spirulina, owing to increasing concerns worldwide regarding food safety. In the highly pro¿table area of LCs, we arepromoting the joint development of inks for inkjet-printed quantum dot color ¿lters (QDCFs) that use inkjet technology as next-generation
display materials.
Functional ProductsThis segment centers on polymers and compounds. Guided by the concept of functional products that add comfort, we will leverage our
specialized composite technologies to enhance our competitiveness in a variety of areas, including coatings and molded products, withthe goal of adding comfort. This segment also includes products such as hollow-¿ber membrane modules, which allow gases but notliquids to permeate.
We have also identified four priority areas for developing new businesses—Electronics, Automotive, Next-Generation Packaging
and Healthcare—and have established the New Business Development Headquarters to oversee related efforts. The New Business
Development Headquarters integrates three key functions—our R&D team, which encompasses medium- to long-term development; theProduct Innovation Center, which is charged with bringing together core technologies; and our marketing team, which is responsible forenhancing popularity and market penetration—to seamlessly oversee all stages of new business development.

2

Value Transformation: Strengthening our corporate structure through qualitative reforms of businesses

Having defined “qualitative reforms” as clarifying competitive advantages and shifting to products capable of withstanding
macroenvironmental changes, we will encourage a shift to businesses with more of a focus on social value and sustainability. In
the Packaging & Graphic segment, we will concentrate resources on packaging solutions and specialty inks. In the Color & Display
segment, efforts will center on high-performance products, notably functional pigments, and naturally derived products. In the Functional
Products segment, we will emphasize environment-friendly products and high-value-added products such as epoxy resins. Shifting tobusinesses with more of an emphasis on social value will also entail a
Segment
Value Transformation
review of general-purpose products and a bold revamping of business• Packaging solutions
models, including those for core businesses. In some cases, this may
Packaging Publication
Printing inks, adhesives, films, polystyrene&inksnecessitate moving resolutely to replace certain businesses. Accordingly,• Specialty inks
Graphic
Jet inks, security inks
we established Groupwide criteria for withdrawing from a business,
which calls for a three-pronged evaluation of any business from three• High-performance products
Functional pigments (pigments for color filters, effect pigments, pigments for
Color
Generalperspectives, namely, growth potential, profitability and scale, andpurposecosmetics and pigments for NIP*), LC materials, next-generation display materials&
pigments
Display• Naturally derived products
consideration for market standing when plotting exit strategies. The
Natural colorants* Nonimpact printing
Board of Directors and senior management will have the final say, but• Environment-friendly products
General
Waterborne resins, polyurethane resins, UV-curable resins
processed
establishing criteria will enable us to accelerate the decision-making
Functional products• High-value-added products
Products Solvent-based
process, which will in turn strengthen the entire Group.
Epoxy resins, PPS compounds, industrial adhesive tapes,
products
hollow-fiber membrane modules

DIC Report 201910

3

New Pillar Creation: Creating new businesses in response to ESH-related issues and social changes

The New Business Development Headquarters has identi¿ed four priority areas for developing new businesses: Electronics, Automotive,
Next-Generation Packaging and Healthcare. In Electronics, we will seek to apply our ink dispersion technologies in such areas as Àexible
printed circuit boards (PCBs) and next-generation displays to develop functional materials that contribute to a digital society. Under theAutomotive banner, we will foster businesses that make use of our composite technologies, including those used to produce carbon ¿berreinforced plastic (CFRP), which helps reduce vehicle weight, thereby improving fuel ef¿ciency. In Next-Generation Packaging, we will
work to develop packaging materials that help address issues such as food safety and food loss. Recognizing the elimination of marine
plastics, a result of inappropriately discarded used plastic products, as a critical challenge, we have also established a project team topromote a switch to viable alternatives and develop biodegradable materials. Our focus in Healthcare will be on developing productsthat leverage biotechnological processes accumulated in the cultivation of algae and contribute to health and longevity. We will also
make strategic investments to expedite our entry into new markets. This will include investing in startups in related ¿elds and seeking
advantageous M&A opportunities.
4

A Ànancial strategy centered on cash Áow management

DIC111 places top priority on optimizing cash Àow management by working continuously to strengthen our ¿nancial health and investingin portfolio transformation. The plan budgets ¥20.0 billion for strategic investments aimed at accelerating growth. Through suchinvestments, we will endeavor to maintain stable, appropriate dividends while at the same time ensuring sufficient risk management
capabilities. We are con¿dent that this will enable us to attain the ¥70.0 billion target we have set for consolidated operating income in¿scal year 2021, the ¿nal year of DIC111. We have adopted return on invested capital (ROIC) as an indicator of investment ef¿ciency andearnings before interest, taxes, depreciation and amortization (EBIDTA)*, used globally as a measure of a company’s pro¿tability.
* Differences in interest rates and methods for calculating taxes and depreciation make it impossible to directly compare the profitability of companies in different
countries and territories using simple income figures. Because it minimizes these differences, EBITDA is widely used around the world to assess the relative
profitability of companies.

Ensuring the DIC Group is loved and respected worldwide by maintaining effective ESG and humanresources management| Strengthening Our Management Foundation
Against a backdrop of rapid social change, promoting qualitative reforms in businesses and strengthening our management foundation willbe crucial to our ability to respond appropriately and achieve sustainable growth. To this end, we will promote ambitious initiatives in linewith three key themes.
1

Using digital transformation to reengineer business processes

We are taking active steps to advance digitization, which we acknowledge will dramatically change our business processes. In production,
we are using digital technologies to further automation and enhance the visibility of various data with the goal of improving quality andefficiency. In R&D, we are reengineering business processes by utilizing materials informatics (MI), which involves applying material
properties databases and AI to materials science.
Guided by DIC111, we launched a project that employs two main approaches to this challenge. The first is using backcasting toformulate future predictions that take into account advances in IT and other external changes. The second involves exploring how toelevate current themes and what sort of future we can create by doing so. Such initiatives will focus on, among others, advancing factory
automation, discovering new chemical materials and creating new business models.
2

Human resources management

Human resources management (WING)

The success of our efforts to develop new business models is linked inextricably to ourability to bring together the expertise and energy of diverse human resources. To this end,
we inaugurated WING, a program with four core themes that seeks to rally our diverse
human resources to enhance our responsiveness to social change and drive diversity
management, through which we will transform DIC’s fundamental identity. Of paramountimportance is to reform work styles to capitalize on individual talents, particularly byshifting the focus of evaluation from quantity to quality. At the same time, we will establish
a new global human resources system and a system for selecting our next management
team to help us uncover new core human resources from among the more than 20,000
DIC Group employees in 64 countries and territories, as well as to ensure that we havethe right people in the right places. To facilitate the ef¿cient execution of these initiatives,in ¿scal year 2019 we established the Human Resources Strategy Department.

DIC Report 201911

Work Style Reform
Reform work styles to capitalize on diversified individuality

HR Infrastructure Reform
Adopt global human resources system and unify Group system

Next Management Selection
Establish system to appoint the next management teamGlobal Talent Development
Develop global human resources

3

Promoting ESG management, including the setting of
numerical targets

Recent years have reconfirmed our awareness of the fact that
addressing environmental, social and governance (ESG)-related
issues is crucial to realizing sustainable growth and that this iswhat ultimately determines corporate value over the long term.
In fiscal year 2018, we established the ESG Unit to facilitate amore systematic approach to related initiatives. Group companies
continue to work as one to promote a variety of efforts worldwide
and have set a number of speci¿c numerical targets.
In the area of environmental issues, we aim to reduce carbon
dioxide (CO2) emissions across global DIC Group sites by 30%
from the ¿scal year 2013 level by ¿scal year 2030. To this end,
we encourage sites to introduce or switch entirely to energy fromrenewable sources, including solar power and biomass. In May
2019, we declared our support for the Task Force on Climaterelated Financial Disclosures (TCFD), pledging to disclose
climate-related information in line with TCFD recommendations
going forward. We also remain committed to effective stewardshipof the products we provide and have stepped up efforts to develop products such as inks made with bio-derived materials and highly
recyclable polystyrene. As an outgrowth of this, we introduced a proprietary sustainability index that evaluates businesses based on
environmental impact and contribution to the aforementioned targets, underscoring our commitment to developing products and solutions
that bene¿t both customers and markets. We have aligned this index to the United Nations’ Sustainable Development Goals (SDGs).
Note: For more information on the SDGs, please see page 2.

Introduced a proprietary sustainability index
Social issues
Climate change
Resource conservation

Enhanced measures to cope with waste plastic and marine plastics

Primary value of DIC products

Focus on packaging materials● Contain renewable

Raw materials

raw materials● Energy saving andthermal insulation■ Develop technology which
can use chemical recycle
materials and bio raw materials● Reduce weight
SDGs

Goals 7, 13, 14 and 15

Sustainable use of natural resources● Cope with marine plastics● Recyclable● Reduce waste

Packagingmaterials
supply chain● Long life
● Reduce volume
SDGs

Films for printing■ Develop films suitable forrecycling, such as easily
separable multilayer materials
and monomaterials

Consumption

Goals 9, 11 and 12

Recovery and sorting

Food, safety and health■ Develop easily peelable inks
and adhesives● Health and comfort● Reduce food waste● Safety● Low VOCs
SDGs

Recycling

Goals 2 and 3■ Develop technologies toprevent deterioration ofrecyclable plastics

Under the “social” heading, we also remain committed to furthering the incorporation of diversity into management to create a corporate
culture that allows a wide range of individuals to reach their full potential. In May 2018, we formulated the DIC Group Human Rights Policy,
which conforms with global codes governing human rights to guide related initiatives in the years ahead.
Efforts to address governance-related issues include creating a system based on Japan’s Corporate Governance Code and establishingkey performance indicators (KPIs) to measure diversity in management, including the percentage of foreign nationals and women in
executive positions, both of which we intend to boost to 30% by ¿scal year 202.
In closing, as a manufacturer of ¿ne chemicals we continue to recognize ensuring operational and occupational safety, reducing our
impact on the environment and promoting the stringent management of chemical substances as fundamental to our business activities,
and to see “doing the right thing and doing it right” as the true way forward. We pledge to continue working to ensure that DIC remains acompany that is loved and respected worldwide.

DIC Report 201912

New Medium-Term Management Plan: DIC111
DIC has formulated a new medium-term management plan, DIC111, to clarify strategies for transforming its business portfolio, that is, for building a
sophisticated portfolio focused on ESH-related issues and social changes by advancing qualitative reforms in existing core businesses and creating
new businesses with the potential to become mainstays.

Two strategies for businessportfolio transformation| DIC’s Future Vision■ Establish a vision based on proactive efforts to address key imperatives

arising from social changes such as the spread of digitization and
ESH-related issues, including those affecting the global environment
and food supplies

Social value

Target Areas• Sustainability• Contribution tomarkets

Become a unique global company that is trusted
by society by providing value (safety and peaceof mind, color and comfort)

Economic value• Growth• Profitability• Capital efficiency| Basic Strategies: Business Portfolio Transformation to Achieve Growth
Value Transformation
Generate sustainable cash inflow by making qualitative reforms to businesses■ Bolster competitiveness by transforming DIC’s business structure

Shift from businesses vulnerable to macroenvironmental changes to those with differentiated high-value-added products■ Make businesses more conscious of social value

Shift to businesses with more of a focus on value provided to customers and markets and on sustainability throughout product life cycles

Segment

Value Transformation

Packaging&
Graphic

Publication
inks

Color
&
Display

Generalpurpose
pigments

Functional
Products

Generalprocessed
products
Solvent-based
products

Percentage of Net Sales(2018)

Percentage of Net Sales(2021)

Percentage of Net Sales(2025)

73%

76%

85%

50%

58%

62%

59%

63%

75%

• Packaging solutions
Printing inks, adhesives, films, polystyrene• Specialty inks
Jet inks, security inks
• High-performance products
Functional pigments (pigments for color filters, effect pigments, pigments forcosmetics and pigments for NIP*), LC materials, next-generation display materials• Naturally derived products
Natural colorants* Nonimpact printing• Environment-friendly products
Waterborne resins, polyurethane resins, UV-curable resins• High-value-added products
Epoxy resins, PPS compounds, industrial adhesive tapes,
hollow-fiber membrane modules

New Pillar Creation

Priority area

ESH-related
challenges

Electronics

・High-speed
communications
・Shift to AI, IoT and
the Internet ofEverything (IoE)

Optical control• Next-generation display
technology
Design technologies for QD inks, peripheral materials• PCB, semiconductors, sensors
functional materials
Insulating and conductive materials,
Dispersion and ink
sensors
technologies

Automotive

・Connected
・Autonomous
・Shared・Electric

Composite
technologies

Create new pillars by elevating and gaining
competencies in priority areas■ Create new businesses from the perspectiveof ESH-related issues and social changes
Contribute to the resolution of challenges throughbusiness activities by identifying areas at the intersectionof ESH-related issues/social changes and DIC’s corecompetencies■ Make active use of external resources
Help establish new social ecosystems through M&As
and the use of corporate venture capital (CVC)・Food issues
・Food safety and
Next- Generation
security
Packaging・Marine plastics
・Distribution
revolution

Healthcare

Targets• Multi-materialization

CFRP, expanded lineup ofengineering plastics• Next-generation battery materials

Inorganic active materials for negativeelectrodes and binder resins• Approach to safety, security andGlobal channels

food loss
Barrier materials

Packaging solutions• Sustainable packaging

・Health and longevity Algae cultivation
technology
・Food safety andsecurity
Color materials

DIC Report 2019

13

DIC’s
competencies

Monomaterials, recyclable andbiodegradable materials• Replacement of artificial colorants

Natural colorants for foods andbeverages• Nutrition
Functional foods, supplements

| Strengthening Management Infrastructure
IT and Human Resources Strategies
Digital transformation for business process reengineering

Human resources management■ Realize targeted business process reengineering by using backcasting to formulate■ Rally diverse human resources as the source of

future predictions that take into account advances in IT, while at the same timeusing existing technologies to improve efficiency over the three years of DIC111

DIC’s competitiveness as a global company (WING)Work Style Reform■ Activate marketing by utilizing MA*1
■ Streamline sales processes by utilizing and restructuring SFA*2

Future prediction based on
advances in IT

Phase 1
Utilization of existing
technologies

Sales

Production■ Improve productivity by utilizing IoT and AI■ Enhance visibility of production processes and quality control

Technology and R&D■ Simulate effectively with machine learning■ Accelerate research and development by utilizing MI

Support■ Improve productivity by utilizing RPA*3 tools

Reform work styles to capitalize on diversified individuality

HR Infrastructure Reform
Adopt global human resources system and unify Group system

Next Management Selection
Establish system to appoint the next management team

*1 Marketing Automation *2 Sales Force Automation *3 Robotic Process Automation

Business process
reengineering at DIC

Global Talent Development■ Entry into new markets created through the advancement of technologies■ New business models created by revamping in supply chains■ Dramatic productivity improvement and creation of new work styles

Develop global human resources

Promotion of ESG Management
Set targets in each area of ESG and accelerate implementation of initiatives■ Reduce CO 2 emissions attributableto production

Environmental ■ Supply products and solutions that

Target: 30% reduction of CO2 emissions*1 (2030)

contribute to sustainability

SocialGovernance■ Promote diversity and work style reform■ Enforce “safety first” principle■ Diversify management team
■ Reflect cost of capital in decision making

Target: Rate of female employees in management positions in Japan:
4.4% (2018) ⇒ 8% (2021) ⇒ 20% (2025)
Rate of foreign employees in Japan: 1.0% (2018) ⇒ 5% (2021) ⇒ 10% (2025)
Target: Rate of foreign nationals or women in executive positions:
15% (2018) ⇒ 20% (2021) ⇒ 30% (2025)*1 Compared with 2013

| Cash Flow Management
Budget ¥250.0 billion for strategic investments aimed at business portfolio transformation and balance financial health and shareholder returns■ Prioritize efforts to maximize cash flow by promoting business portfolio transformation, guided by DIC111, and budget ¥250.0 billion

for strategic investments aimed at accelerating growth, while working continuously to strengthen financial health■ Shareholder returns (Dividend payout ratio): Around 30%

Pay dividends in line with profit growth maintaining stable dividends■ Financial health (D/C ratio): Around 50%

Dividend
payout ratio

Support growth by maintaining financing and risk management capabilities

D/C ratio

50%

30%

| Quantitative Targets

Set target for consolidated operating income of ¥70.0 billion in the final year of DIC111. Achieve target by shifting to high-value-added products.
2018
ActualNet sales

2019
Target2020
Target2021
Target(Billions of yen/%)Change(2021/2018)¥805.5¥850.0¥900.0¥950.0+18%

Operating income

48.4

52.0

60.0

70.0

+45%

Operation margin

6.0%

6.1%

6.7%

7.4%

−

Net income*

32.0

35.0

37.0

45.0

+41%

81.4

87.0

91.0

102.0

+25%

10.1%

10.2%

10.1%

10.7%

−

1

EBITDA*2
EBITDA to net sales ratio
ROE

10.4%

¥/US$

¥110.46

10 ‒12%¥110.00*1 Net income attributable to owners of the parent*2 EBITDA = Net income*1 + Total income tax + Interest expenses – Interest income + Depreciation and amortization

DIC Report 201914¥110.00−¥110.00

The DIC Group’s Approach to
Value Creation
Delivering

Business Portfolio
Transformation Under DIC111

Environmental
issuesManagement capital(Inputs)

Funds essential tothe provision of products
and services

Integrate technologies
and make use ofopen innovation

Organic molecular
designOptics and
color

Core
technologies

Applicability
assessment(Coating, printing,molding, adhesion)

Polymer
designDispersion

ies

New Pillar Creation
Create new businesses in response to
ESH-related issues and social changes

lut

on

ti o

Evo

i

Natural capital
Environmental resources andraw materials essential tothe provision of products
and services

ls
de
mo

Value Transformationlog

Ability to rally diverse humanresources as the source of
DIC’s competitiveness as a
global company (WING)

bu
sin
es
s

Strengthen DIC’s corporate structure throughqualitative reforms of businessesof techno

Human capital

Overh
aul
of

ips
rsh
e
rtn
a
P

r a ti o n

Accumulated technologies
and know-how

Climate change

Break free of
reliance on
independent efforts

In t
eg

Intellectual capital

Cyber threats

Diverse social imperatives

Manufacturing capital
Facilities and equipment
essential to the provisionof products and services

Human rights
issuesnFinancial capital

Health-related
issuesResource
depletion

of

org

a ni

zati

onal

capa bi lit i e s

D igitra
al t

Marshal individual
strengths to createorganizational dynamism

Social capital
Cooperation with stakeholders
and local communities

Reinforce ESG initiatives
The DIC WAYDIC Report 2019

15

ns

f

m
or

a

With the aim of ensuring a sustainable society, the DIC Group strives to provide products andsolutions that respond to the needs of markets and its customers and add color and comfort to life.

Outcomes

Segment

Outputs

Packaging & Graphic

Next-generation
packaging inks andcoatings, functional
packaging adhesives,
industrial-use jet inks,
othersColor & Display

Pigments for color filters,
pigments for cosmetics,
effect pigments, natural Color and display
colorants, LC materials, materials that makenext-generation display life colorful
materials, others

Functional Products

Sustainable polymers,
environment-friendly
PPS compounds for
Functional products
automotive components, that add comfort
high-performance industrial
adhesive tapes, others

Business area

Electronics

Automotive

Packaging materials
that bring safety andpeace of mind

Outputs

Outcomes

Technologies andfunctional productsthat support the spreadof digitization

Provide functional materials that
contribute to a digital society

Technologies andfunctional materials that
underpin efforts to transformthe automotive industry

Provide composite materials that
contribute to a mobility society

Packaging materials
that help reduce foodloss and support
Next-Generation Packaging sustainability
Algae cultivation
technologies withapplications extending
from food safety to
Healthcare
advanced medical care

DIC Report 2019

16

SDGs

Provide packaging solutions that
contribute to environmental
sustainability
Provide fine chemicals produced
using biotechnological processes
that contribute to health and longevity

SDGs Goals
2, 3, 6, 7, 9, 11,
12, 13, 14 and 15

Businesses that Contribute toa Sustainable Society
1 Business Activities that Add Value to Society
Developing Environment-Friendly ProductsStandards for Evaluating Environment-Friendly Products

The DIC Group has long been committed to effective stewardship of the
products it provides. Conscious always of the importance of harmony withthe environment, the Group promotes the development of environmentfriendly products that are useful to society by, among others, 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.
DIC established internal standards in Japan for evaluating environmentfriendly products in 2002 and has since worked to increase the number of
products that qualify for this designation in its portfolio. (For details, pleasesee “New Technology Development and Value Creation” on page 137.)

Evaluation
category

Evaluation standards

Energyconsumed

Reduction of energy used in production,transportation, etc.

Materials used

Reduction of volume of materials used,
use of nonrecyclable materials, etc.

Hazards

Use of materials with lower levels of
toxicity, etc.

Waste generated

Reduction of environmental impact of
disposal, etc.

Downstream
contributions

Case by case

Products that Contribute to the Realization of Clean Technologies
The DIC Group develops materials that contribute to the realization of clean technologies designed to resolve critical global environmental issues.
The Group promotes the development of clean technology–related products for target markets that leverage its distinctive technologies and shares
related information with stakeholders via its global website. (For more information, please see “New Technology Development and Value Creation”
on page 137.)
WEB

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

DIC showcases diverse, creative technologies and business activities that contribute to a sustainable society in the special feature section of the
DIC Report, published annually, with the goal of helping stakeholders better understand DIC Group products.
Products Showcased in DIC Report Special Features
Fiscal year

Product

Value provided to society

2010

PPS resins

Reduce halogen content, thereby helping suppress the formation of dioxin

2011

Hyperbranched polystyrene

2012

Industrial-use adhesive tapes

Helps reduce CO2 emissions by facilitating production of the world’s
first super-thin film
Facilitate thin adhesive tapes with added high-performance features,
thereby contributing to the reductions of energy and resource use

2013

High-performance epoxy resinsand curing agents

Use of environment-friendly epoxy resins and curing agents that boast
outstanding heat resistance and flame retardance in electronics components
and materials reduces the environmental impact of their disposal

2014

Hybrid resins for coatings

Resists pollution and reduces operator working loads

2015

Adhesives with oxygen-barrier properties

Can be used instead of film to prevent oxygen permeation andkeep food fresh longer

2016

Hollow-fiber membranes and membrane modules Facilitate control of the degasification and aeration of liquids

2017

PPS compounds

Reduce vehicle weight, among others, thereby lowering CO2 emissions

2017

Environment-friendly polyurethane resins
for use in artificial and synthetic leathers

Facilitate safe and secure production and use

2018

Pigments for color filters

2018

Contribute to superb brightness and picture quality and the
reduction of energy consumption
Outstanding seal improves the reliability of LCDs and the safety ofAdhesive primers for optical and packaging films food products

DIC Report 201917

2 An Expanded Focus: From Environment-Friendly to Sustainable
Clarifying the Value that the DIC Group Provides
Recognizing that externally driven strategies that involve setting targets from the perspective of helping address social imperatives andenvironmental issues have gained currency, the DIC Group has reordered its businesses based on functions offered and the markets they serve.
7ZRH[DPSOHVDUHWKH',&*URXS¶VSRO\SKHQ\OHQHVXO¿GH 336 FRPSRXQGVZKLFKKHOSUHGXFHWKHZHLJKWRIDXWRPRWLYHFRPSRQHQWVDQGWKH
PASLIM series of adhesives with oxygen-barrier properties, which help prolong the shelf life of food products, thereby contributing to the reductionof food loss. As these examples show, materials have the power to contribute to the betterment of society in ways that may not be immediately visible.
Standards for Evaluating
Environment-Friendly Products

Value Clarified through Focus on Functions Provided

Evaluation category

Energyconsumed

Functions offeredSocial issues

Contain renewable raw materials

Climate change/resource conservation

Energy saving and thermal insulation
Reduce weight

EnvironmentFriendly
Products

Cope with marine plastics

Materials used

Recyclable

Sustainable use of naturals resources

Reduce waste

Hazards

Long life
Reduce volume
Health and comfort

Waste generated

Food, safety and health

Reduce food waste
SafetyDownstream
contributions

Low VOCs

In addition to clarifying the value that DIC Group products provide to stakeholders, DIC believes that a greater focus on product functions will help
accelerate efforts Groupwide to advance the development of sustainable products.

Developing a Proprietary Sustainability Index: Driving Further Evolution
7KH',&*URXSKDVLQDXJXUDWHGWKH6XVWDLQDELOLW\6WUDWHJ\:RUNLQJ*URXSDFURVVEXVLQHVVZRUNLQJJURXSDQGLVSURPRWLQJWKHGHYHORSPHQWRI a
new proprietary sustainability index for gauging the effectiveness of efforts to promote sustainable businesses. These include an environmental
impact indicator that combines such concepts as sustainable contributions to customers and markets as measured by value provided. The Group
believes this index will enable it to better elucidate the functions of its products, which help address social imperatives and respond to socialchanges.
The new proprietary sustainability index will also facilitate effective management from the perspective of both economic value and social value (thescales of the index) and will underpin its efforts to transform its business portfolio with the aim of strengthening its business structure and assisting
SURGXFWGHYHORSPHQW7KLVLQYROYHVTXDQWLI\LQJLQGLFDWRUVEURDGO\LQWHUPVRISURGXFWLRQWHFKQRORJ\DQGVDOHV3ODQVDUHWREHJLQXVLQJWKHQHZ
LQGLFDWRUVLQ-DSDQLQ¿VFDO\HDUDQGVXEVHTXHQWO\WRH[SDQGDSSOLFDWLRQJOREDOO\The DIC Group will continue to promote the evolution of its sustainable businesses in the years ahead as it strives to become a unique globalorganization that is trusted by society.
A new sustainability index has been incorporated
into the new medium-term management plan,
DIC111, as an indicator of social value

X: Environmental
impactSustainabilityindex

Two strategies for business portfoliotransformation

Social value

Target Areas

・Sustainability
・Contribution tomarkets

Sustainability
index

Economic
value
・Growth・Profitability
・Capitalefficiency

Y : Market contribution(Contribution to resolution of social imperatives
and realization of a richer society)

DIC Report 201918

Messages from Top Executives at Regional Headquarters

Ensuring the Success of DIC111
Sun Chemical Corporation
President & CEO

Myron Petruch
With over $3.0 billion in revenue and more than 8,000 employees, Sun Chemical is a proud member of the DIC group. Sun Chemical is a
global leader in inks, pigments and rapidly growing in advanced materials, where many of these products have been developed internallyby DIC. As we embark on a new Mid Term Plan with DIC111, we look forward to the opportunities and challenges presented by a changing
and dynamic marketplace. We will continue to upgrade our products and market portfolio. We will have a global focus yet service ourcustomers’ needs locally.
Anchored by our core ink and pigment businesses, Sun Chemical is establishing a platform of high growth, high margin specialty products. These products,
which have been added to our portfolio through an active acquisition program and internal development, provide Sun Chemical the opportunity to enter orenhance its position in valuable growth markets such as cosmetics, security inks, plastic and ID cards and printed electronics.
We have bene¿tted from the ability to leverage the signi¿cant resources of the DIC group as we execute our strategy. The world-classresearch and development resources of the DIC group are the strongest among all our competitors. These resources allow Sun Chemical
to continually present our customers and brand owners with new and innovative products and ideas to enable them to succeed in theirmarkets, thereby strengthening our business relationships.
As we continue to develop our product portfolio in order to bring new and innovative products to our customers, we remain mindful of ourobligation to do so in a responsible manner that considers our impact on the environment. We are committed to the promotion and developmentof sustainable products that are eco-friendly and reduce the environmental footprint that we and our customers leave on the planet.
We are excited about our future at Sun Chemical and we are committed to doing our part to make the DIC group and DIC111 a success.

Transformation and Growththrough Collaboration
DIC Asia Paciﬁc Pte Ltd
Managing Director

Paul Koek
The Asia Paci¿c region is a vibrant and one of the fastest growing region. It is made up of several countries, which is rich in culture,
language and ethnicity. With a dynamic and professional workforce of 3,600 employees, we are presently operating in 11 countries with 19
facilities across Asia Paci¿c.
The Group’s vision as embedded in the DIC111 is on the principle of sustainable growth through value transformation. This is against the
backdrop where the global economy has signi¿cantly changed and the fact that globalisation itself has now taken a different meaning.
All this coupled with the dawn of the Fourth Industrial Revolution has taught us that change and transformation is inevitable. The once
sheltered Asia Paci¿c Region is now vulnerable but this can bring us many opportunities.

DIC Report 201919

Messages from Top Executives at
Regional Headquarters

As part of the strategy to support the DIC111 in the Asia Paci¿c region, the concept of the “3 S” will be implemented. This will entail
the Support and the strengthening of the functional and specialist organisations that we will need to transform into. Capitalising on theprofessional skillsets of our valued employees and technology, new business pillars aligned to the sustainable theme will be identi¿ed,developed and launched. The drive for business alignment through partnership and M&A’s activities will be one of our main focus.
Through Specialization, the “Shared Economy” framework will be expounded, driven and implemented. Driving business ef¿ciency throughthe use of digital tools and analytics, will help the region to focus on “doing things right the ¿rst time” while enhancing our valued Customer’s
experience and touchpoints through sustainable quality products.
Capitalising on the Group’s strength in technology and aligning with the fast changing laws in the Region, DIC Asia Paci¿c group will
also drive the Sustainability pillar. This will improve and embrace our outreach to our valued Customers – through “Color and Comfort”,
business collaboration with our partners through our practice of the “DIC Way” and promoting “Diversity, Mobility and Transparency” ina safe work environment for our valued employees. We strongly believe that through effective collaboration with all our stakeholders, thedrive to success is assured.

Promoting Our New DIC111
Medium-Term Management Plan
DIC (China) Co., Ltd.
ChairmanShinsuke Toshima
DIC (China) oversees the operations of the DIC Group in Greater China, encompassing 29 companies—including two in Hong Kong and¿ve in Taiwan—and approximately 2,300 employees. Having set a target for regional net sales of ¥8 billion-plus for ¿scal year 2019, we
recognize that achieving Value Transformation, a core policy of DIC111, is the most critical challenge we face in the rapidly evolving local
economy. Accordingly, we will press ahead with decisive efforts to make qualitative changes to our core businesses, maintaining an accurate
grasp of the direction of market change.
While the size and potential of the market in Greater China cannot be denied, the existence of a wide range of regional business risks
is another point that is often raised. Of particular note in recent years is the swift and seemingly relentless deployment of environmental
regulations in the PRC, which in addition to causing considerable confusion in the market has given rise to uncertainty regarding business
continuity. The DIC Group must take measures to prepare for near-future risks in a number of its businesses. However, if we look at itfrom another perspective this may also be a major business opportunity. That is to say, the certainty that multiple companies will drop out of
the market will likely help dispel the futile, price only–based competition that currently dominates every sector as a result of overcapacity forsome time. In such a market, the critical competitive strength will be brand reliability.
Against this backdrop, as a member of the DIC Group—an organization strongly committed to advancing sustainability—we will actively
and earnestly promote ESG-related initiatives, leveraging the trust we earn to expand our operations and contributing to achievement of thetargets of DIC111.
In the current ¿scal year, we established a Corporate Communications Department at DIC (China) with the aim of bolstering recognitionof the DIC name and increasing the Group’s pro¿le. The new department will work with DIC’s Corporate Communications Department topromote effective branding efforts in Greater China and support the efforts of product divisions.

DIC Report 201920

Fiscal Year 2018 DIC Group Topics
Topic

1

DIC Teams Up with Biotech Startups in the Developmentof Naturally Derived Materials

DIC and U.S. Firm Checkerspot Enter Into JDA for Advanced High-Performance Materials
DIC and Checkerspot, Inc., a high-performance materials innovation company, entered into a joint development agreement (JDA)
to create a new class of novel, high-performance polyols. Checkerspot, which boasts unique capabilities in biotechnology, including
genetic modi¿cation technologies and highly ef¿cient cultivation systems for algae, creates original materials from sugars and othercarbohydrate molecules generated from CO2. In addition to aligning with its goal of contributing to the realization of a low-carbon
society, partnering with Checkerspot is a clear ¿t for DIC from the perspective of its Value Transformation strategy. The Company
also anticipates synergies with its own extensive and pioneering cultivation technologies for Spirulina.
The agreement will enable the two companies to leverage DIC’s compounding, polymer design technologies and Checkerspot’s
bio-derived materials technologies to develop products that reduce the use of petroleum-based ingredients and provide novel
performance and functions. The partnership will focus on products and formulations with applications in core DIC business areas,
including adhesives, coatings, printing inks and lubricants. DIC will capitalize on the performance features of such materials todevelop distinctive products, underpinning its efforts to deliver new value and create new markets.

Algae observed with a microscope

Ski and ski wear made with materials manufactured by Checkerspot

DIC Invests in Japanese Startup to Develop Bio-Derived Chemicals
On August 31, 2018, DIC completed investment in Tokyo-based Green Earth Institute Co., Ltd. (GEI), a biotech startup carved out
from Research Institute of Innovative Technology for the Earth (RITE) to commercialize sustainably produced “green” chemicals.
GEI is engaged in the development and commercial production of bioethanol from nonfood biomass feedstocks and of amino acids
for use as food and animal feed additives. GEI has leveraged innovative Corynebacterium fermentation technologies to realize a
low-cost production process for bio-derived chemicals. The two companies will also capitalize on DIC’s global market network, aswell as its ability to develop applied products.
DIC is investing in and working with biotech startups with the aim of strengthening its biotechnologies that use algae and othermicroorganisms and expanding related businesses. Through such efforts, the Company will continue working to expand its portfolio
compatible with a sustainable society.

DIC Report 201921

Topic2

Prior to the Announcement of DIC111, the Company Announced
a New Organization that Clarified the Value Provided by DIC

With the aim of reÀecting its commitment to addressing social imperatives and deliver value to society, DIC established business
units based on the concepts of market and value provided. The Company also expanded the scope of each business unit to facilitate
the swift reallocation of resources.

Segments in 2018

Segments from 2019

Printing Inks

Packaging & Graphic

Offset inks
Gravure inks
Flexo inks
Security inks

Metal decoration inks
News inks
Packaging adhesives
Printing supplies

Gravure inks
Flexo inks
Metal decoration inks
Security inks
Jet inks
Offset inks
News inks
Printing supplies

Fine Chemicals
Organic pigments
Pigments for color filters
Effect pigments
Pigments for cosmetics

Thin-film transistor liquid crystal(TFT LC) materials
Supertwisted nematic liquid crystal(STN LC) materials

Packaging adhesives
Coextruded multilayer films
Polystyrene

Metal carboxylates
Sulfur chemicals

Polymers

Color & Display
Polystyrene

Organic pigments
Pigments for color filters
Effect pigments
Pigments for cosmetics
Health foods
Natural colorants

Polyester resins
Plasticizers
Acrylic resins
Amino resins
Epoxy resins
Urethane resins
Alkylphenols

Alkyd resins
Unsaturated polyester resins
Waterborne resins
Methacrylate resins
Phenolic resins
Ultraviolet (UV)-curable resins
Fluorochemicals

TFT LC materials
STN LC materials

Compounds
Jet inks

Functional Products
Polyphenylene sulfide (PPS) compounds
Colorants
High-performance optical materials, Coatings
Functional compounds

Waterborne resins
UV-curable resins
Acrylic resins
Epoxy resins
Phenolic resins
Polyurethane resins
Polyester resins
Fluorochemicals
Plasticizers
Unsaturated polyester resins
Alkylphenols
Metal carboxylates
Sulphur chemicals(lubricant additives)

Application Materials
Coextruded multilayer films

Plastic containers
Decorative sheets
Hollow-fiber membrane modules
Industrial adhesive tapes
Magnetic tapes Processed sheet molding compounds (SMCs)
Incombustible decorative boards Coatings for building materials
Health foods
Natural colorants

DIC Report 201922

PPS compounds
High-performance compounds
Plastic colorants
Coatings
Industrial adhesive tapes
Magnetic tapes
Hollow-fiber membrane modules
Decorative boards and interior
housing products
Decorative sheets anddecorative films
Coatings for building materials
Processed SMCs
Molded plastic products

Packaging & Graphic
Packaging Materials that Bring
Safety and Peace of Mind
President, Packaging & Graphic Business Group

SDGs Goals 12, 13 and 14

Hideo Ishii

This segment includes not only
printing inks but also adhesives,materials and other products andsolutions for packaging applications,the markets for which continue
to see robust growth in emerging
economies in Asia and elsewhere.

［Printing Materials］［Packaging Materials］

Gravure inks
Flexo inks
Metal decoration inks
Security inks
Jet inks
Offset inks
News inks
Printing supplies

Packaging adhesives
Coextruded multilayer ¿lms
Polystyrene

DIC Report 201923

Segment Operating Results
Net Sales

FY2018FY2019 (Forecast)

Operating Income
and Operating Margin

FY2018FY2019 (Forecast)

460.0(Billions of yen)

19.9

20.2

(Billions of yen)

434.7

3.2
79.0

71.1

4.6
4.6％

4.4％

10.0
255.3

271.7

120.3

121.7

(12.0)
Japan

6.8(12.4)The Americas
and Europe

Asia and
Oceania

9.6

6.0

(0.1)
EliminationsJapan

The Americas
and Europe

Asia and
Oceania

Eliminations

Operating margin

Figures for ¿scal year 2018 have been restated to reÀect revisions to segmentation.

Business Strategies Under DIC111
Packaging Solutions

Specialty Inks

Products: Gravure inks, Áexo inks, adhesives, ÀlmsÀlms and polystyrene

Products: Jet inks and security inks

With the aim of furthering global management integration andexpanding its selection of high-value-added products, the Group will
aggressively invest resources in the area of security inks and seek
to enhance pro¿ts by capturing demand in Asian markets, as well as
by cultivating applications and expanding production capacity in the
PRC for jet inks.

In the promising market for packaging materials, the DIC Groupwill endeavor to accelerate the growth of its businesses throughproduct portfolio expansion. To this end, the Group will focus ondeveloping and improving sustainable products in response to thechanging needs of packaging manufacturers, enhancing production
con¿gurations for gravure inks and adhesives in India, Vietnam and
the People’s Republic of China(PRC), and expanding the scale of its
operations through joint ventures and M&As.

(Billions of yen)
Business policy

Publication Inks

Quantitative targets(Upper row: Net sales, Lower row: Operating income)
FY2018(Actual)

FY2019(Target)FY2020(Target)FY2021(Target)¥434.7 ¥460.0¥476.7¥494.0

¥19.9

¥23.3

¥26.0

Products: Offset inks and news inks

Anticipating a further decline in demand in the publications market,
the Group will work to rationalize its operations by rightsizing globallyand optimizing its Groupwide production con¿guration for publication
inks and news inks.

TOPIC

Packaging &Graphic

Concentrate resources onhigh-value-added products(packaging solutions andspecialty inks)

DIC and Sun Chemical Acquire Luminescence Holdings

In February 2018, DIC and Sun Chemical acquired Luminescence Holdings Ltd., amanufacturer of security inks based in Essex, in the United Kingdom. Inks manufactured by
Luminescence are used in security printing, that is, the printing of banknotes, tax stamps,
passports, ID cards and other items for which the prevention of forgery and tampering is a key
concern. In the year since, Luminescence has seen robust sales, exceeding original estimates,
and its operating margin has increased. Despite rising raw materials prices, attributable to thehigh price of oil, these results underpinned an improvement in pro¿tability in the DIC Group’s
printing inks business in the Americas and Europe in ¿scal year 2018.
Sun Chemical is the leading manufacturer of printing inks in the Americas and Europe andboasts a product portfolio encompassing offset inks, flexo inks, gravure inks and coatings.
While it already had a security inks business, the DIC Group looks forward to capitalizing on thisacquisition—which brings together Luminescence’s technological capabilities and the Group’s
vast global sales network—to boost its share of this market and cement its competitive advantage.

DIC Report 2019

24

¥20.2

Color & Display
Color and Display Materials that
Make Life Colorful
President, Color & Display Business Group

SDGs Goals 3 and 13

Masami Hatao

Products in this segment include a wide
variety of materials indispensable todigital devices, including LC materials
and organic pigments for color filters, aswell as pigments for cosmetics, natural
colorants and other materials that aresafe and gentle for people to use.

［Color Materials］
Organic pigments
Pigments for color ¿lters
Effect pigments
Pigments for cosmetics
Health foods
Natural colorants

DIC Report 201925

［Display Materials］
Thin-¿lm transistor liquid crystal(TFT LC) materials
Supertwisted nematic liquid crystal(STN LC) materials

Segment Operating Results
FY2018FY2019 (Forecast)

Operating Income
and Operating Margin

124.1

129.6

(Billions of yen)

Net Sales(Billions of yen)

0.1

101.4

106.6

34.5

34.5

（11.7）FY2018FY2019 (Forecast)

15.0

0.0

12.1％

15.4
11.9％

7.9

8.3

7.0

7.2

（11.5）
Japan

Overseas

Eliminations

Japan

Overseas

Eliminations

Operating margin

Figures for ¿scal year 2018 have been restated to reÀect revisions to segmentation.

Business Strategies Under DIC111
Color Materials
designable metallic and pearlescent pigments, while in pigments for
NIP efforts it will emphasize expanding its product lineup by bringing
new products into the digital printing market.

Expand functional pigments (pigments for cosmetics, effect pigments
and pigments for nonimpact printing (NIP))

In addition to seeking to establish a leading position globally throughM&As, the DIC Group will take steps in the area of pigments forcosmetics to increase its production capacity for specialty pigments
and enter the personal care market by expanding its processed
pigments business. In the area of effect pigments, the Groupwill endeavor to catch up to demand by broadening its lineup of

Natural colorants (Linablue®)
The Group will make a full-scale entry into the promising market
for food and beverage colorings.

Display Materials
Functional pigments (pigments for color Àlters)
The Group will endeavor to maintain its global leading position by broadening
its product lineup.
TFT LC materials
The focus here will be on leveraging patent and pricing strategies to expand
sales and accelerating market development efforts in the PRC.
Quantum dot (QD) inks
The Group will continue to promote the development of QD inks, which
continue to hold promise as next-generation display materials.

TOPIC(Billions of yen)
Business policy

Color &
Display

Ensure balance between
acceleration of growth throughshifting of resources to strategic
products and maintenance ofstability through rationalizationof existing products

DIC Acquires High-Purity Iron Oxide Pigments Business

In July 2018, DIC and Sun Chemical acquired the high-purity iron oxide pigments
business of the Cathay Industries Group, the production base of which is located in
Valparaiso, Indiana, in the United States.
High-purity iron oxide pigments produced at the Valparaiso site are used
extensively in lip color, eye shadow, foundation primer and other cosmetics
products. These pigments have obtained certification under the COSMOS(COSmetic Organic Standard) program—the global standard for organic andnatural cosmetics—and are thus expected to help grow pigments for cosmetics
into a core component of the DIC Group’s pigments business, bolstered by market
growth, as well as by rising awareness of product safety and the tightening of
pertinent regulations. As such, this business will also contribute to the Group’s
sustainability. Looking ahead, the DIC Group will actively build on this acquisition to
expand its global market share and reinforce its production infrastructure.
DIC Report 201926

Quantitative targets(Upper row: Net sales, Lower row: Operating income)
FY2018(Actual)

FY2019(Target)FY2020(Target)FY2021(Target)¥124.1 ¥129.6¥140.0¥149.4

¥15.0

¥16.0

¥18.2

¥15.4

Functional Products
Functional Products that Add Comfort
President, Functional Products Business Group

SDGs Goals 6, 12 and 13

Kazuo Hatakenaka

This segment provides coating andcomposite materials with diverse
functions that address environmental
issues and are used widely in state-ofthe-art electronics products.

［Performance Materials］
Waterborne resins
Ultraviolet (UV)-curable resins
Acrylic resins
Epoxy resins
Phenolic resins
Polyurethane resins
Polyester resins
Fluorochemicals
Plasticizers
Unsaturated polyester resins
Alkylphenols
Metal carboxylates
Sulphur chemicals(lubricant additives)

DIC Report 201927

［Composite Materials］
Polyphenylene sul¿de(PPS) compounds
High-performance compounds
Plastic colorants
Coatings
Industrial adhesive tapes
Magnetic tapes
Hollow-¿ber membrane modules
Decorative boards and interior
housing products
Decorative sheets and decorative ¿lms
Coatings for building materials
Processed sheet molding
compounds (SMCs)
Molded plastic products

Segment Operating Results
Net Sales

FY2018FY2019 (Forecast)

282.1

296.9

Operating Income
and Operating Margin(Billions of yen)

0.1

20.8

212.0

(26.6)(27.4)
Japan

Overseas

Japan

24.1
8.1％

8.7

15.4

14.0

Eliminations

0.0

7.4％

6.7

208.3

FY2019 (Forecast)(Billions of yen)

112.3

100.4

FY2018Overseas

Eliminations

Operating margin

Figures for ¿scal year 2018 have been restated to reÀect revisions to segmentation.

Business Strategies Under DIC111
Global Strategic Products that :ill Expand
Sales of Environment-Friendly Products

Highly Profitable Products with Functions that
Provide Comfort

Products: Waterborne resins, UV-curable resins, acrylic resins,
polyurethane resins, polyester resins and PPS compounds

Products: Epoxy resins, plasticizers, Áuorochemicals, phenolic resins,
hollow-Àber membrane modules, industrial adhesive tapes and others

The DIC Group will invest actively in products that are not only environmentfriendly but also have a positive impact on markets and society. The Groupwill also seek to expand its resins production bases in Asia and acquire nextgeneration engineering plastics through M&As. In addition to expanding sales
in key markets (coatings, adhesives and products for automotive applications),
the Group will work to design sustainable polymers to promote the use ofrecyclable and biomass-derived raw materials.

In addition to responding to sophisticated needs and delivering outstanding
functionality in niche markets, the Group will launch highly pro¿table next-generation
resins for optical and electronics applications, expand sales of industrial adhesive
tapes for mobile and automotive applications, make a full-fledged entry into andexpand share of the market for large-scale hollow-¿ber membrane modules, and work
to ensure solid growth in the area of molding compounds for medical applications.
(Billions of yen)

Efforts to Pursue Efficiency and Improve
Profitability

Business policy

Products: Unsaturated polyester resins, plastic colorants, highperformance compounds, printed products, laminated products and others
The Group’s efforts here will focus on maximizing profitability byrationalizing both low-profit businesses and sites and integratingproduction facilities to improve ef¿ciency.

TOPIC

Functional
Products

Achieve social contributions
and growth by strengthening
lineup of environment-friendly
and functional products

Quantitative targets(Upper row: Net sales, Lower row: Operating income)
FY2018(Actual)

FY2019(Target)FY2020(Target)FY2021(Target)¥282.1 ¥296.9¥318.4¥343.2

¥20.8

¥28.4

¥33.6

¥24.1

DIC Receives Incentive Award in the 17th GSC Awards for its Development of Sheet-Form Heat Storage Material

DIC received an Incentive Award in the 17th Green Sustainable Chemistry (GSC) Awards, conferred by the Japan Association for Chemical Innovation (JACI), for its
development of a sheet-form heat storage material. Phase change materials (PCMs), which utilize the thermal properties of phase change—the process of changing
from liquid to solid and vice-versa—liquefy at a certain temperature above melting point. PCMs laminated together with other materials have long been used inconstruction, but dif¿culties in altering size and poor workability have prompted housing builders and general contractors to call for the development of new materials.
Leveraging its proprietary coating and compounding technologies, DIC developed a technology for uniformly dispersing PCMs into resin with no degradation ofproperties to create a thick ¿lm, thereby preventing the materials from oozing and leaking during phase change. In addition to performance comparable to that of PCMs
in laminated packages, the resulting sheet-form heat storage material can be cut, bent and fastened into place with screws on-site. DIC’s sheet-form heat storage
material can also be laminated together with avariety of other materials such as plasterboard
Cut
FastenBend
and flooring, expanding options for use inhouses and other buildings and facilitating
use in walls and ceilings, which is dif¿cult withconventional products.

DIC Report 2019

28

P

00

P

30

P

Water-Based Flexo Ink for High-Resolution
Printing on Flexible Packaging(Marine Flex LM-R)

Special Feature

35

Water-Based Water- and Oil-Resistant Coating Varnish for
the Inner Surfaces of Paper and Paperboard Food Packaging(HYDRECT)

Product Development Designed to Create New Value

The DIC Group is providing distinctive
solutions that respond to evolving needs
related to safety, peace of mind and theenvironment arising from social changes.
The realization of a sustainable society depends on our ability to respond to needs
related to safety, peace of mind and the environment. The DIC Group is capitalizing ontechnologies honed over 111 years to develop distinctive solutions that directly addresscritical challenges, including the issue of marine plastics and the need to reduce use of
substances harmful to the environment.

DIC Report 201929

Special Feature: Product Development Designed to Create New Value

Packaging & Graphic

SDGs Goals 3, 12 and 13

Water-Based Flexo Ink for High-Resolution Printing on
Flexible Packaging (Marine Flex LM-R)

Realizing Gravure Ink–Level High-Resolution Printing and
Significantly Lower VOCs and Emissions of CO2
Value Creation

Expanded use of environment-friendly water-based flexo inks in the area of food packaging

The market for packaging inks today is dominated by solvent-based
products, which boast outstanding wettability on plastic film substrates anddry swiftly after printing. Nonetheless, demand for water-based, UV-curable
and other environment-friendly alternatives is rising sharply, underpinned by
the need to address key social imperatives, including the lowering of volatileorganic compounds (VOCs), which pollute the air and impact working
environments; the curbing of global CO2 emissions; and the reduction ofenergy consumed in printing.

plastic film. Leveraging its proprietary mixing and dispersion technologies,
DIC succeeded in developing an innovative ink that achieves a high opticaldensity, lifting print quality to a level similar to that obtained with gravure
printing. The Company also revamped the resin binder, beginning with its
structure, to prevent the ink’s high density from weakening adhesion duringlamination and to increase the resolubility of ink remaining on the printing
plate following transfer to the print substrate, thereby ensuring the stability ofprint quality. The new ink, Marine Flex LM, which was announced at a trade
show in October 2016, upended many preconceived notions of flexo inks.

While printing on packaging films centers on gravure printing, an intaglio
printing process, and flexographic printing, a type of letterpress printing,the latter is leading the global shift toward water-based inks. The principal
reason for this is that flexographic printing uses less ink than gravure
printing, meaning that even when water-based inks—which dry more slowly
than solvent-based inks—are used, drying requires little energy, facilitatingsuperior productivity, i.e., high-speed printing. However, the small volume of
ink used makes high-density, high-precision printing difficult, as a result of
which flexographic printing has traditionally been seen as inferior to gravure
printing, spurring demand for improvements.
Against this backdrop, in fiscal year 2015 DIC and DIC Graphics created a
project team to develop a water-based flexo ink for use on flexible packaging
for food products, cosmetics and other items, which is made primarily with

Material printed using Marine Flexo LM

DIC Report 201930

Special Feature: Product Development Designed to Create New Value

Flexographic Printing Process① Ink is supplied to the anilox roller③ Ink is transferred from the flexo cylinder to the substrate② Ink is transferred from the anilox roller to the flexo cylinder④ Ink dries (cures) on the substrate

Flexo cylinder

Cushion tapePlatecylinderDryer(Oven, UV/EB)

Impression
cylinderInk supply chamber
Substrate

Anilox roller

Nonimage element
Image element

A Distinctively
DIC Response

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An innovative, environment-friendly offering, Marine Flex LM
facilitated the DIC Group’s entry into the market for packaging inks.
However, sales volume fell short of expectations. One reason forthis is the steep capital investment necessary for customers to
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which it is expected to take some time before the level of adoption
in Japan catches up to that in Europe and the Americas. However,certain major beverage manufacturers have stepped up efforts to
VZLWFKIURPRLOEDVHGJUDYXUHWRZDWHUEDVHGÀH[RJUDSKLFSULQWLQJto reduce VOCs and CO2 emissions and conserve energy used inprinting on film for polyethylene terephthalate(PET) bottle wraparound labels and sought to expand the range of products for whichsuch labels are used. Convinced by this trend that its instinct had not

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and a top layer sandwiching an ink layer—that are laminated
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is, an ultrathin substrate and a reverse-printed top layer. Moreover,PET bottles have ridges, which enhance strength, recyclability andother properties, so labels must also be able to withstand contact
and vibration during transport from factory to warehouse or store
and the integrity of inks and label designs must be maintained evenif bottles become soaked when used outdoors.

Ordinary multilayered flexible
packaging film for food products

Wrap-around label film and inks

Plastic film

Plastic film

Colored inks

Colored inks

White ink

White ink

Adhesive
PET bottle surface

Vapor-deposited film
Ink is protected by being sandwiched between twolayers of film.

The white ink printed on the side of the label that touches
the PET bottle must deliver excellent resistance to moistureand abrasion.

DIC Report 201931

Special Feature: Product Development Designed to Create New Value

To fulfill such challenging requirements, the project team leveraged the DIC
Group’s broad network, asking companies to which potential customers consign
the manufacture of wrap-around labels to evaluate the physical propertiesof prototypes, repeatedly conducting rigorous tests and making continual
improvements. The challenges here were many and included developing an
exclusive white ink (for white underprinting, which creates opacity so that label
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agent, improving wet abrasion resistance during transport and ensuring stablelarge-lot print quality, i.e., by optimizing ink viscosity, plate surface drying speed
and ph level.

Performance Comparison

Comparison of Ink Composition
100

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DZDWHUEDVHGÀH[RLQNWKDWSDVVHGDOOPDWHULDOSURSHUWLHVHYDOXDWLRQWHVWVDQG
boasted VOCs and CO2HPLVVLRQV HQHUJ\FRQVXPSWLRQ VLJQL¿FDQWO\ORZHUWKDQ
solvent-based gravure inks. The new ink and the Marine Flex ECG digital color
management system, developed by DIC Graphics, together make it possible
WRXVHPXOWLFRORUSURFHVVSULQWLQJLQVWHDGRIVSRWFRORUVIRUSULQWLQJRQÀH[LEOH
packaging and thus to reduce wasted ink and improve operating rates for printing
equipment. Soon afterward, the new ink—Marine Flex LM-R—was chosen by
6XQWRU\%HYHUDJH )RRG/LPLWHGIRUXVHRQWKHODEHOVRIWKHOLWHUERWWOHVRI
its core Suntory TennensuiZDWHU6KLSPHQWVWR6XQWRU\EHJDQLQ0D\

Solvent

4

Water

Content（％）

80

3Workability

Additives
60

Signiﬁcantreductionin VOCs

Stability
on press

2
1

Resins0

Pigment

40

Marine Flex
Conventional

Optical density

High-speed
printability

20

Odor

Drying speed

0

Solvent-based ink

Marine Flex

Marine Flex ECG and DIC COLORCLOUD● 0D[LPL]HVSDFNDJHSURGXFWLRQZRUNÀRZ
● Reduces spot color ink, ink used when changing colors and waste ink● Use of DIC COLORCLOUDIDFLOLWDWHVHI¿FLHQWFRORUVHOHFWLRQ

Spot color ink data

Plate making

Breakdown data

AUCOLOR

Computer Color Matching(CCM)

DIC Report 201932

Special Feature: Product Development Designed to Create New Value

Suntory: A Customer’s Story
Sustainability Initiatives

Reducing the Environmental Impact of Packaging

6LQFHLWVIRXQGLQJLQWKH6XQWRU\*URXSKDVVRXJKWWRFRQWULEXWHWRD
sustainable society as a company committed to “Mizu To Ikiru” ‘(“living withwater”). To this end, we are committed to delivering products and servicesof the highest quality, as well as to promoting initiatives aimed at ensuringharmony with nature.

The Suntory Group is working to reduce the environmental impact of
its packaging. The focus of these endeavors has shifted from making
conventional materials lighter, thinner and more compact to modifying
existing and developing new materials. With consumer awareness ofsustainability and rising demand for recyclable packaging and easily
removable labels rising, the environmental soundness of products is
expected to directly affect end users’ purchasing trends in the years ahead.

%DVHGRQLWVORQJWHUP(QYLURQPHQWDO9LVLRQWRZDUGWKH6XQWRU\*URXSKDVVHWWDUJHWVIRUDQGKDVORQJEHHQDQLQGXVWU\OHDGHULQ
promoting efforts to reduce CO2 emissions and its environmental impact.
Having positioned issues related to water as its priority, the group is
implementing a variety of next-generation initiatives in line with the Suntory
Group Water Philosophy, including the Outdoor School of Forest and Waterand the Suntory Mizuiku Natural Water Education program, with the aim ofteaching people about the importance of water. Employees also contribute tosociety by taking part in tree thinning and planting activities at water sources.

In addition to ensuring stable supplies, enhanced quality and costcompetitiveness, the Suntory Group looks for materials that offer a lower
environmental impact. This belief was behind its recent decision to adopt
DIC’s Marine Flex LM-R water-based flexo ink for printing wrap-around
ODEHOV7KHGHFLVLRQWRSULQWODEHOVZLWKZDWHUEDVHGÀH[RLQNVSUHVHQWHG
several challenges, including developing technologies to ensure the
VDPHKLJKGH¿QLWLRQDQGSURGXFWLYLW\DVJUDYXUHLQNVEXWWKHRXWVWDQGLQJ
environmental performance of Marine Flex LM-R encouraged us to take
WKHSOXQJH:HWKXVEHFDPHWKH¿UVWFRPSDQ\LQWKHEHYHUDJHLQGXVWU\WR
DGRSWZDWHUEDVHGÀH[RLQNVIRUWKLVSXUSRVHThe Suntory Group is also promoting the development and adoption ofenvironment-friendly packaging through its “2R + B” (Reduce, Recycle+ Bio) strategy, as well as through bottle-to-bottle recycling, and has
LQWURGXFHG3(7ERWWOHFDSVPDGHZLWKELRGHULYHGPDWHULDOV6XFKinitiatives continue to earn high marks.

Outdoor School of Forest and Water

COMMENTThe Suntory Group places a strong emphasis on environmental protection in all areas of
LWVRSHUDWLRQV,QFRQVLGHULQJZKHWKHUWRDGRSWZDWHUEDVHGÀH[RLQNVZHZHLJKHGXSWKH
ULVNRIEHLQJWKH¿UVWFRPSDQ\WRGRVRDJDLQVWWKHULVNRIQRWWDNLQJWKLVVWHS5HFRJQL]LQJ
the potential impact of environment-friendly water-based inks on the packaging industry
as a whole, we became the first company to adopt DIC’s Marine Flex LM-R waterEDVHGÀH[RLQN%\PRUHTXLFNO\GHYHORSLQJLQFUHDVLQJO\LQQRYDWLYHHQYLURQPHQWIULHQGO\packaging, we can help pass on a sustainable global environment to the next generation.
Accordingly, our focus is on driving our industry forward, rather than on maintaining thestatus quo. We look forward to seeing DIC continue to actively disseminate information on
WKHHQYLURQPHQWDOEHQH¿WVRIZDWHUEDVHGÀH[RLQNVDQGHQFRXUDJHWKHLUXVHDVZHOODV
to raise awareness of environmental issues. Environment-friendly materials will continue
to be an important consideration for packaging manufacturers, so we also look forward to
new ideas and suggestions from DIC in the years ahead.

DIC Report 201933

General Manager,
Packaging Material Department,
Supply Chain Management Division,
SUNTORY MONO=UKURI E;PERT LIMITED

Hiroyuki Iwai

Packaging Material Department,
Supply Chain Management Division,
SUNTORY MONO=UKURI E;PERT LIMITED

Fuyuko Wakaumi

Special Feature: Product Development Designed to Create New ValueKEY PERSON from DIC

We seek to build win–win relationships with new clients.

For this project, we secured the cooperation of companies to which customers consign label manufacturing and of printing companies—which
WRJHWKHUIRUPWKHFRUHRIWKHZUDSDURXQGODEHOVXSSO\FKDLQ²DQGWKXVEHQH¿WHGIURPWKHLUH[SHUWLVHLQHYDOXDWLQJWKHSK\VLFDOSURSHUWLHVDQGLQÀH[RJUDSKLFSULQWLQJZLWKZDWHUEDVHGLQNV,QWKLVDQGRWKHUVXFKHIIRUWVZHVHHNWREXLOGZLQ±ZLQUHODWLRQVKLSVZLWKQHZFOLHQWVZKLOHDWWKHVDPH
time deepening collaboration in both human and technological terms. This project also reinforced our belief that such an approach will be crucial torealizing the pledge to deliver packaging solutions that contribute to sustainability for the global environment outlined in DIC111.
Liquid Ink Product Group, Osaka Branch, DIC Graphics Corporation

KEY PERSON from DIC

Toshiya Fuji

Packaging innovations aligned with Brand Owner’s needs.

The Marketing Management Unit started to develop water-base flexo ink for flexible packaging for Suntory, one of the biggest
beverage company in Japan. The direct marketing toward Brand Owner was the key success for entering in new business for petbottle’s label ink. The road toward this achievement was not easy, but the marketing team was able to grasp the accurate demand of
6XQWRU\VWUHDPOLQHWKHRYHUDOOVXSSO\FKDLQRIWKHPDQXIDFWXUHE\FRRSHUDWLQJDPRQJVW',&*UDSKLFVDQGWKH/RJLVWLFV0DWHULDOVDVZHOODVWKHVDOHDQGWHFKQLFDOXQLWV7KHUHIRUHE\DSSURDFKLQJDQGKHDULQJGLUHFWO\WR6XQWRU\WKHWHDPFRXOGVHOHFWWKHVSHFL¿F
target products and provide the accurate solution to the brand owner.
Unit Leader, Next-Generation Packaging Material Business Unit, New Business Development Headquarters, DIC Corporation

KEY PERSON from DIC

Yoshiaki Fukuda

Our task was to leverage the convenience of DIC COLORCLOUD in the area ofwater-based Áexo inks.

Marine Flex ECGZKLFKZDVGHYHORSHGWRKHOSH[SDQGWKHSRSXODULW\RIRXUZDWHUEDVHGÀH[RLQNLVDGLJLWDOFRORUPDQDJHPHQWV\VWHPWKDWLPSURYHVWKHHI¿FLHQF\RISDFNDJLQJSURGXFWLRQUHGXFHVZDVWHGLQNDQGLPSURYHVRSHUDWLQJUDWHVIRUSULQWLQJHTXLSPHQW2XUH[LVWLQJDIC COLORCLOUD±EDVHGFRORUPDQDJHPHQWV\VWHPZKLFKZDVODXQFKHGLQ¿VFDO\HDUKDGDOUHDG\HDUQHGKLJKPDUNVIURPGHVLJQHUVDQGSULQWLQJÀRRUVIRUUHGXFLQJWLPHDOORWWHGWRWKHSURFHVVRIWULDODQGHUURUDQGVKRUWHQLQJWLPHUHTXLUHGIRUFRORUSULQWFKHFNVThe DIC Group’s ability to provide superior digital solutions is one of its key strengths.
Sales Team 3, Tokyo Liquid Ink & Coatings Sales Group 3, Liquid Ink & Coatings Division, DIC Graphics Corporation

KEY PERSON from DIC

Akihiro Tsuchiya

We sought to maximize the DIC Group’s extensive network.

In addition to printing inks, resins and packaging materials, the DIC Group’s operations encompass the production and sale of plastic
pallets and containers used in distribution. Such logistics materials are sold directly to a variety of customers, including beer brewers andlarge rental companies. Thanks to the extensive business contacts we have built up in these businesses, we enjoy direct access to thevoices of brand owners, ensuring that we are aware of overall trends in the industry.
The distinctive, broad network that the DIC Group has built as an organization handling a wide range of products is one of the factors
behind the success of this project. I look forward to continuing to propose solutions that brand owners seek from us, as we did in the caseVWXG\LQYROYLQJWKHDGRSWLRQRIRXUZDWHUEDVHGÀH[RLQNSUHVHQWHGLQWKLVVSHFLDOIHDWXUHManager, Logistics Materials Sales Group, Composite Material Products Division, DIC Corporation

KEY PERSON from DIC

Hiroki Mitsuhashi

Material properties evaluation tests posed a higher hurdle than we had expected.

For DIC’s ink to be adopted for use on wrap-around labels, it absolutely must pass the material properties evaluation tests of thecompanies to which potential customers consign the manufacture of labels. These tests posed a higher hurdle than we had expected andwe failed repeatedly. However, the evaluation process helped give us a solid understanding of just how harsh an environment PET bottles
are placed in between shipment from the factory through to sale and use. Balancing print quality and environmental performance is a
GLI¿FXOWFKDOOHQJH,ORRNIRUZDUGWRDSSO\LQJWKHH[SHULHQFH,JDLQHGWKURXJKWKLVSURMHFWWRWKHGHYHORSPHQWRIQHZSDFNDJLQJLQNVManager, Dispersion Technical Group 4, Dispersion Technical Division 1, Tokyo Plant, DIC Corporation

DIC Report 201934

Rikei Sasaka

Special Feature: Product Development Designed to Create New Value

Packaging & Graphic

SDGs Goals 13 and 14

Water-Based Water- and Oil-Resistant Coating Varnish
for the Inner Surfaces of Paper and Paperboard Food Packaging(HYDRECT)

Increasing the Recyclability of Food Packaging to Reduce
Waste and Contribute to Environmental Conservation
Value Creation

Packaging materials that bring safety and peace of mind

Paper and paperboard food packaging such as hamburger wrappers and take-out
boxes for pizza and donuts are commonly coated with a thin layer of polyethylene
to prevent grease from oozing out and creating a mess. However, because
polyethylene is left behind when such packaging is chemically dissolved forrecycling, it must be removed beforehand using a process called precipitation. In
Japan, recovered paper and paperboard laminated with polyethylene is classified,based on its suitability for recycling, as rank B* and applications for the resulting
recycled paper are limited.

Plastic Packaging Waste Generation per Capita (2014)* Classifications are determined by the Japanese Federation of Printing Industries
and contained in its guidelines for recyclable printed matter.

Post-consumer plastic that finds its way into rivers and streams and eventually
into the ocean as a consequence of improper disposal, among others, continues
to increase sharply as the global population expands. Microplastics—tiny
fragments of plastic created through degradation by waves, UV light and otherprocesses that break down larger pieces of debris—have been identified as aparticular concern because of the danger to people and ecosystems causedby their entry into the marine food chain. Accordingly, one target set forth in
the Sustainable Development Goals (SDGs), adopted at the UN Sustainable
Development Summit in 2015, is to “prevent and significantly reduce marine
pollution of all kinds, in particular from land-based activities, including marine
debris and nutrient pollution” by 2025. This has since become a critical theme,with participants in the 2018 G7 Summit, held in Charlevoix, Quebec, Canada,
agreeing to reinforce related initiatives.

Source: Plastic Packaging in Japan and Overseas (Presentation materials), Ministry of theEnvironment, Japan (Published in Japanese only; English translation of title by DIC)

Having recognized this as an urgent challenge for the chemicals industry, DIC
has begun developing products that will help address the issue of marine plastics
by reducing waste from used food containers by increasing the recyclability of
post-consumer food packaging and the materials therein. In October 2018, theCompany announced the first of these, HYDRECT, a highly recyclable waterbased coating varnish that boasts excellent resistance to water, oil and heat
when coated on paper. In February 2019, DIC kicked off its new medium-term
management plan, DIC111, to guide the Company from fiscal year 2019 throughfiscal year 2021, that includes a pledge to deliver packaging solutions that
contribute to sustainability for the global environment.

DIC Report 201935

Special Feature: Product Development Designed to Create New ValueA Distinctively
DIC Response

Developing HYDRECT, an FDA-compliant water-based coating varnish that is highly
recyclable and boasts excellent resistance to water, oil and heat“With the Tokyo 2020 Olympics and Paralympics imminent, the improper disposalof waste plastic in Japan is an issue gaining considerable attention. Isn’t there
DQ\ZD\ZHFDQUHSODFHSODVWLF¿OPVODPLQDWHGRQSDSHUIRRGFRQWDLQHUVZLWKD
coating that is less harmful to the environment?” DIC’s efforts to develop a new
coating varnish were inspired by a customer query addressed to DIC Graphics
in 2017. This entreaty also underscored growing global calls for sustainable
packaging. The development team began looking at ways to address this issue
and soon discovered a promising candidate in a coating developed by DIC
Group company Sun Chemical that boasts outstanding water and oil resistance,
is compatible with both flexo and gravure printing, and can be recycled into
paper. However, there was also a downside: Sun Chemical’s coating contains asubstance that violates Japan’s Act on the Evaluation of Chemical Substances
and Regulation of Their Manufacture, etc. It was thus necessary to replace
this substance and adjust the coating’s composition. Several candidates wereselected and tested, a process of trial and error that eventually led to thesuccessful commercialization of the product in autumn 2018.
Paper and paperboard food containers coated with the new varnish demonstrate
revolutionary performance features. Resistant not only to liquid and oil but alsoheat, these containers can be used in both regular and microwave ovens.
0RUHRYHUWKHGHJUHHRIRLODQGKHDWUHVLVWDQFHLVVLJQL¿FDQWO\KLJKHUWKDQWKDW
of conventional water-based varnishes. The ingredients used comply with thestandards stipulated in both Japan’s Food Sanitation Act and the U.S. Food andDrug Administration (FDA) and there is no danger of VOCs being released during
the coating process. Perhaps most important, because the varnish dissolves
together with paper in a sodium hydroxide solution, post-consumer paper and
SDSHUERDUGFRQWDLQHUVFRDWHGZLWKWKHYDUQLVKDUHFODVVL¿HGDVUDQN$PHDQLQJ
that they can be recycled into paper or paperboard.

Packaging coated with HYDRECT

Recyclability of HYDRECT
Paper coated with HYDRECT dissolves completely in chemicals (left),while that laminated with polyethylene does not (right)

Switch from polyethylene lamination to HYDRECT improves suitability for recycling from rank B to rank A
Printing materials(Paper, inks, processing chemicals)

Printed mattersuitable for recycling

Recovered Paper: Recycling Ranks Based on
Suitability for Recycling

Rank A

Suitable for paper：○
Suitable for paperboard：○

Paper

Production

Presence does not impede recycling
into paper or paperboard

Rank B

Applications for recovered
paper and paperboard

Newspapers

Recycling

Suitable for paper：×
Suitable for paperboard：○

Can be fully recycled
into paper

Brochures,magazines,
books

Presence impedes recycling into paper
but not into paperboard

Rank C

Paperboard

Suitable for paper：×
Suitable for paperboard：×

Presence impedes recycling into paperor paperboard

Rank D

Suitable for paper：×
Suitable for paperboard：×

Presence of even a tiny amount makes
recycling into paper or paperboard
impossible because it cannot be removed

Paper boxes,
picture books

Production

Can be fully recycled
into paperboard

Recycling
Corrugated cardboard
boxes, cardboard tubes

DIC Report 201936

Source: Guidelines for Recyclable Printed Matter (September 2014 edition),
Japanese Federation of Printing Industries (Published in Japanese
only; English translation by DIC)

Special Feature: Product Development Designed to Create New Value

trading companies that do business with paper manufacturers
and convenience stores, a strong indication of both the highlevel of interest in addressing the issue of plastic pollution andpotential demand for HYDRECT. At present, a wide range of paper
and paperboard food container manufacturers and processing
companies are exploring the adoption of HYDRECT.

DIC’s new coating varnish, HYDRECT, was one of the products
on exhibit in DIC’s booth at the Tokyo International Packaging
Exhibition 2018 (Tokyo Pack 2018). Presentations were given inwhich donuts and gyoza (pot stickers) in prototype packages were
heated in a microwave, prompting many booth visitors to pick up the
packages and pepper booth staff with questions. Multiple inquiries
were received from packaging-related companies, as well as fromKEY PERSON from DIC

We will continue working to expand the areas where HYDRECT can be usedinstead of polyethylene.

Since the launch of HYDRECT, I have been particularly surprised by the number of inquiries for applications that we had not even imagined.
Although the greatest advantage this varnish offers is that it is an alternative to polyethylene, it cannot currently be used on some types ofcontainers because of their shape. We are thus promoting ongoing efforts to modify the product with the aim of expanding compatibility, not only
for containers but also for other applications.
In April 2018, the Packaging Solution Center was established at the Tokyo Plant, where I currently work, to advance collaboration with customers
in the development of packaging. Looking ahead, we will continue working closely with DIC Graphics, which operates the facility, as we take on thechallenge of developing next-generation packaging materials like HYDRECT, taking inspiration from feedback received from visiting customers.
Manager, Dispersion Technical Group 3, Dispersion Technical Division 1, DIC Corporation

KEY PERSON from DIC

Hiroshi Kikuchi

HYDRECT is a product that truly demonstrates the collective strength of the
DIC Group.

The technical cooperation of Sun Chemical was a key factor in our success in developing a water-based varnish that can be coated onto paper,
eliminating the need for polyethylene lamination, in what was really a very short time. Sun Chemical provides a broad range of packaging solutions,
IRFXVLQJRQPDUNHWVLQ(XURSHDQGWKH$PHULFDVZKLOHZHDUHGRLQJWKHVDPHLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQ%\SXUVXLQJFROODERUDWLYHSURGXFWGHYHORSPHQWDQGVDOHVLQLWLDWLYHVOLNHWKLVZHDUHFRQ¿GHQWWKDWZHZLOOEHDEOHWRSURYLGHRXUJOREDOO\DFWLYHFXVWRPHUVwith a wealth of options to resolve key issues. We very much look forward to developing new products like HYDRECT that truly demonstrate thecollective strength of the DIC Group.
Manager, Team 5, Tokyo Liquid Ink & Coatings Sales Group 1, DIC Graphics Corporation

KEY PERSON from DIC

Jun Naitou

Our goal is to capitalize on the Tokyo 2020 Olympics and Paralympics touncover new demand.

The tremendous reaction to HYDRECT since its launch has given me a true sense of the magnitude of customers’ expectations regarding
sustainable packaging materials. One reason for this is the Tokyo 2020 Olympics and Paralympics, which will welcome visitors from around theworld. The Games will provide an opportunity for companies in Japan to offer a wide range of packaging and packaging materials and to highlightthe sustainability of their products. DIC is no exception. HYDRECT embodies one of the key propositions set forth in our new medium-term
management plan, DIC111, which describes our commitment to providing “packaging solutions that contribute to environmental sustainability.” Our
JRDOLVWRFDSLWDOL]HRQWKH*DPHVWRXQFRYHUQHZGHPDQGE\RIIHULQJSURGXFWVWKDWUHÀHFWFXUUHQWWUHQGVDQGWRIXUWKHUFXOWLYDWHDZDUHQHVVRIWKH
DIC brand in the paper container market.
Supervisor, Team 2, Printing Inks & Supplies Sales Group 3, Offset Inks Division, DIC Graphics Corporation

DIC Report 201937

Takafumi Yamazaki

TopicSun Chemical developed SunColorBox, a unique set of tools and services that enableconsistent and accurate digital color communication
Sun Chemical Promotes Initiatives Aimed at Addressing Important Social Imperatives
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SULQWLQJLQNV7KHFRPSDQ\GHYHORSVDQGVXSSOLHVDEURDGUDQJHRISURGXFWVWKDWDGGUHVVGLYHUVHVRFLDOLPSHUDWLYHV

%UDQGRZQHUVDUHXQGHUFRQVWDQWSUHVVXUHWRVWUHDPOLQHSURFHVVHVLQWURGXFHHI¿FLHQFLHVPDQDJHFRVWE\HOLPLQDWLQJZDVWHDQGUHGXFHWLPHWRPDUNHW%XWWKHEHGURFNRIEUDQGLGHQWLW\LVFRORU,IWKHFRORULVQ¶WULJKWWKHLQWHJULW\RIWKHHQWLUHVXSSO\FKDLQLVFRPSURPLVHG7KLVPHDQVWKDWDFKLHYLQJFRQVLVWHQWFRORUDFURVVVXEVWUDWHVSULQWSURFHVVHVDQGQDWLRQDOIURQWLHUVLVHVVHQWLDOWRWKHHI¿FLHQF\RIWKHZKROHSDFNDJLQJZRUNÀRZ7KHUHDUHWZRPDMRUREVWDFOHVWRWKLV7KH¿UVWLVWKHQXPEHURIYDULDEOHVWKDWPDNHWUXHFRORUFRQVLVWHQF\HOXVLYHVXFKDVSDFNDJHW\SHVVXEVWUDWHVLQNVDQGPRUH7KHVHFRQGLVWKHQXPEHURISDUWLHVZLWKLQSXWWRWKHSURGXFWLRQDQGDSSURYDORIFRORU7KHXQLYHUVHRIEUDQGRZQHUVGHVLJQHUVDQGFRQYHUWHUVLVYDVWDQGJHRJUDSKLFDOO\VSUHDGRXW
:KLOHVRIWZDUHDQGKDUGZDUHWRROVIRUFRORUPDQDJHPHQWDUHDYDLODEOHWKH\DUHRIWHQGHSOR\HGLQFRQVLVWHQWO\E\WKHLQGLYLGXDOOLQNVLQWKHVXSSO\FKDLQ7KHUHVXOWLVDFKDLQRIGLVFRQQHFWHGLVODQGVRIVROXWLRQVUDWKHUWKDQDFRKHVLYHFRPPXQLW\ZRUNLQJWRDQLQGXVWU\VWDQGDUGUHIHUHQFHZLWKHYHU\VXSSOLHUSURYLGLQJLWVRZQVROXWLRQZRUNLQJZLWKLQLWVRZQHQYLURQPHQWZLWKRXWWKHQHFHVVDU\LQWHJUDWLRQQHHGHGIRUDKLJKO\HI¿FLHQWZRUNÀRZ,QSUDFWLFH“FRORUPDQDJHPHQW”LVRIWHQDPL[RIJXWIHHORSHUDWRUH[SHULHQFHDQG
WKHLQFRQVLVWHQWXVHRIPHDVXUHPHQWWRROVDQGVDPSOHV7U\WRPDSWKHFRORUPDQDJHPHQWSURFHVVLQPDQ\SDFNDJLQJVXSSO\FKDLQVDQGWKHSLFWXUHFDQEHFKDRWLFZLWKFRPPXQLFDWLRQEHWZHHQWKH
GLIIHUHQWSDUWLHVRIWHQJRLQJLQORRSVRIDSSURYDODQGUHDSSURYDO)RUEUDQGRZQHUVWKLVLVDUHFLSHIRUHUURULQHI¿FLHQF\DQGXQQHFHVVDU\FRVW,W¶VQRVXUSULVHWKDWFRORUWKDWIDLOVWRPHHWEUDQGRZQHUH[SHFWDWLRQVLVWKHSULPDU\UHDVRQIRUUHMHFWVDQGUHZRUNVSocialImperative

6XQ&KHPLFDOGHYHORSHGSunColorBoxDXQLTXHVHWRIWRROVDQGVHUYLFHVWKDWHQDEOHFRQVLVWHQWDQG
DFFXUDWHGLJLWDOFRORUFRPPXQLFDWLRQWKURXJKRXWWKHHQWLUHSDFNDJLQJVXSSO\FKDLQSunColorBox, a
VHWRILQWHJUDWHGWRROVDOORZVFXVWRPHUVWRVHOHFWWKHPRVWVXLWDEOHVHUYLFHVEDVHGRQWKHVL]HRIWKHLU
EXVLQHVVDQGWKHLQYHVWPHQWUHTXLUHG
6LQFH6XQ&KHPLFDOKDVEHHQLPSOHPHQWLQJWKHSunColorBoxVROXWLRQDWDODUJHQXPEHU
RIFXVWRPHUVLWHVDURXQGWKHZRUOGXVLQJDOOPDMRUFRPPHUFLDOSULQWLQJWHFKQRORJLHVLQFOXGLQJÀH[RJUDYXUHDQGRIIVHWDQGKDVDFKLHYHGWKHIROORZLQJVXEVWDQWLDOVDYLQJVIRUFXVWRPHUVSun Chemical s
Response

25‒30%

LQSUHVVPDNHUHDG\WLPH

30‒40%
in substrate waste

10‒40%

LQULJKW¿UVWWLPHRQSUHVV

20‒70%
LQLQNUHWXUQXVDJH

30‒80%

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VOICE Build a complete support system to achieve customers’ sustainable goals&XVWRPHUVZKRKDYHWDNHQDGYDQWDJHRIWKHWRROVIURPSunColorBoxKDYHDFKLHYHGPDQ\RIWKHLUVXVWDLQDELOLW\JRDOV²DOOE\DFKLHYLQJWKHULJKWEUDQGFRORUWKHILUVWWLPH7KHEHQHILWVDUHIDUUHDFKLQJ:KLOHRXUFHQWUDOFRORUPDQDJHPHQWWHDPPDQDJHVGLJLWDOFRORUPDQDJHPHQWSURMHFWVJOREDOO\LPSOHPHQWDWLRQDQGVXSSRUWDUHDOOSURYLGHGE\WKHORFDO6XQ&KHPLFDOWHFKQLFDOSHUVRQQHO:HKDYHRYHUKLJKO\WUDLQHGSunColorBoxVSHFLDOLVWVZLWKVXSSRUWIURPRXUPRUHWKDQFRORUFHQWHUV7KLVFHQWUDOO\PDQDJHGEXWORFDOO\VXSSRUWHGPRGHOSURYLGHVFXVWRPHUVWKDWSHUVRQDOWRXFKLQKHOSLQJWKHPDFKLHYHERWKWKHLUFRORU
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DIC Report 201938

Patrice AurentyCorporate Governance
Basic Approach to Corporate Governance
The DIC Group identifies the purpose of corporate governance as being to ensure effective decision making pertaining to its
management policy of achieving sustainable corporate growth and expansion through sound and efficient management, whileat the same time guaranteeing the appropriate monitoring and assessment of and motivation for management’s execution ofbusiness activities. With the aim of achieving a higher level of trust on the part of shareholders, customers and other stakeholders
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$FRPSDQ\ZLWKLQWHUQDODXGLWRUV',&PDLQWDLQVD%RDUGRI'LUHFWRUVDQGD$XGLW 6XSHUYLVRU\%RDUG',&KDVDOVRLQVWLWXWHGDQH[HFXWLYHRI¿FHU
system and has established a Nomination Committee, a Remuneration Committee, an Executive Committee and a Sustainability Committee.

General Meeting of Shareholders

Corporate Governance Organization

Appointment

Appointment

Audit

Board of Directors
Nomination Committee
Remuneration Committee

Accounting
audit

President and CEO

Audit & Supervisory Board

Independent auditors

Sustainability Committee

Executive Committee

Internal Control Department

Business groups, New Business Development Headquarters,
Production Management Unit, Technical Management Unit,
R&D Management Unit, headquarters’ administrative units, sites

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 (one of whom is female). In principle, the Board meets once monthly. The Board of Directors is responsible formaking 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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2Nomination Committee

The Nomination Committee was established as an internal committee of the Board of Directors with the aim of ensuring objectivity in the
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3

Remuneration Committee

The Remuneration Committee was established as an internal committee of the Board of Directors with the aim of enhancing the objectivityof procedures for determining executives’ remuneration. The committee, which has been entrusted with responsibility for determining the
VDODULHVDQGERQXVHVRIGLUHFWRUVDQGH[HFXWLYHRI¿FHUVPHHWVDVQHFHVVDU\$WSUHVHQWWKUHHRIWKHFRPPLWWHH¶V¿YHPHPEHUVDUHRXWVLGHZKLOHWKHSRVLWLRQRIFRPPLWWHHFKDLUPDQLV¿OOHGE\DQRXWVLGHGLUHFWRUDIC Report 201939

Corporate Governance

4

Executive Committee

The Executive Committee deliberates and resolves issues related to the execution of business activities. In principle, the committee meets twice
PRQWKO\&RPPLWWHHPHPEHUVDUHGLUHFWRUVDQGH[HFXWLYHRI¿FHUVGHVLJQDWHGE\WKH%RDUGRI'LUHFWRUV0HHWLQJVDUHDOVRDWWHQGHGE\RQH$XGLW& Supervisory Board member as part of the auditing process. Details of deliberations and resolutions are reported to the Board of Directors.
5

Sustainability Committee

The Sustainability Committee, which functions as an advisory body, meets several times annually to formulate sustainability policies and
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Board of Directors. As part of audit activities, one Audit & Supervisory Board member 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

Audit & Supervisory Board

The Audit & Supervisory Board comprises four members, including two outside Audit & Supervisory Board members (one of whom is female).
In principle, the Audit & Supervisory Board meets once monthly. Board activities include debating and determining auditing policies and auditing
plans. Board members also report on the results of audits conducted, as well as attend important meetings, including those of the Board of
Directors, the Executive Committee and the Sustainability Committee, meet with representative directors on a periodic basis to exchange
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DUHDEOHWROHYHUDJHLQWKHSHUIRUPDQFHRIWKHLUGXWLHVDVRXWVLGHGLUHFWRUVRI',&)XOOWLPH$XGLW 6XSHUYLVRU\%RDUGPHPEHU<RVKL\XNL0DVH
LVDTXDOL¿HGFHUWL¿HGSXEOLFWD[DFFRXQWDQWDQGKDVRYHUVHHQFRUSRUDWHDFFRXQWLQJDW',&IRUPDQ\\HDUV2XWVLGH$XGLW 6XSHUYLVRU\%RDUG
PHPEHU.DWVXQRUL7DNHFKLSURYLGHVWD[DFFRXQWLQJVHUYLFHVSXUVXDQWWR$UWLFOHRIWKH&HUWL¿HG3XEOLF7D[$FFRXQWDQW$FWDQGKDVEURDGH[SHULHQFHLQWKH¿HOGRIFRUSRUDWHODZ2XWVLGH$XGLW 6XSHUYLVRU\%RDUGPHPEHU0LFKLNR&KLEDLVDFHUWL¿HGSXEOLFDFFRXQWDQWDQGKDV
extensive experience in corporate auditing.
7

Internal Auditing Department

The internal auditing department is charged with internal auditing, which includes monitoring the effectiveness of internal controls at DIC anddomestic DIC Group companies. For DIC Group companies in Asia, Oceania, the PRC, the Americas and Europe, internal 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. The members of the Audit & Supervisory Board, accounting auditors and the internal
auditing department conduct audits from their respective independent positions, but also liaise periodically to facilitate close cooperation,
thereby ensuring the effectiveness of auditing activities.

| Rationale Behind Current Corporate Governance Organization',&KDVLQVWLWXWHGDQH[HFXWLYHRI¿FHUV\VWHPDPRYHDLPHGDWVHSDUDWLQJGHFLVLRQPDNLQJDQGLPSOHPHQWDWLRQDQGWKHUHE\DFFHOHUDWLQJ
business execution and clarifying responsibilities. As well as appointing three highly independent outside individuals to its Board of Directors,
the Company has taken steps to reinforce its monitoring of business execution. DIC also has a Nomination Committee and a Remuneration
Committee, which include the three outside directors, to ensure objectivity in the nomination of, and in determining remuneration for, directors
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outside members, liaises with the accounting auditors and the internal auditing department. This structure ensures the effective functioningof DIC’s corporate governance system.

DIC Report 201940

Corporate Governance| System of Internal Controls
1

Status of the System of Internal Controls

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To this end, DIC has prepared and operates a system of internal controls, key components of which are summarized below, based upon
the Companies Act of Japan and the Financial Instruments and Exchange Act of Japan. The Board of Directors hears annual reports on
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following is summary of the synopsis:❶ The Company shall work to set forth the DIC Group Code of Business Conduct as the standard regarding compliance, which directors
and employees of the DIC Group shall comply with, and to disseminate the same.
❷ The Company shall establish an internal notification system as a channel available for the employees of the DIC Group and set up
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❸ In order to ensure the duties of directors are performed properly and efficiently within the DIC Group, the Company shall establish
regulations regarding company organization and authority.
❹ The Company shall formulate medium-term management plans and the annual budget based on management policies and management
strategies, and, through dissemination of the same, ensure common goals are shared within the DIC Group. The Company shall makeprogress reports to the Board of Directors.
❺ Information pertaining to the performance of duties by directors shall be recorded, retained and managed appropriately based on theregulations for document management. The Company shall establish regulations for systems of information management and shall
SUHSDUHDV\VWHPIRUSUHYHQWLQJOHDNDJHRIFRQ¿GHQWLDOLQIRUPDWLRQRIWKH',&*URXS❻ The Company shall formulate a risk management policy and shall identify, assess, prioritize and address properly any risks that may
KDYHDVLJQL¿FDQWLPSDFWRQPDQDJHPHQWRIWKH',&*URXS❼ The Company shall determine an administrative department for each subsidiary from the standpoints of the conduct of business andbusiness management, and shall supervise business affairs by dispatching a director to each subsidiary.
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Basic Policy Toward Eliminating Demands by Antisocial Elements',&¶VEDVLFSROLF\DVRXWOLQHGLQWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWLVWRVWDQG¿UPO\DJDLQVWDQWLVRFLDOHOHPHQWVDQGLQQRZD\
to acquiesce to demands presented by such elements. The General Affairs and HR Department is responsible for coordinating efforts to
respond to extortion or other demand presented by antisocial elements, while individuals have been put in charge of efforts at each site andwithin each Group company. These individuals work in close collaboration with lawyers and the police to ensure the Company’s responses
are resolute. DIC has also prepared and distributed a manual on appropriate responses to such demands, with the aim of raising awarenessamong employees.

| Outside Directors and Outside Audit & Supervisory Board Members
1

Number and Role of Outside Directors and Outside Audit & Supervisory Board Members

DIC currently has three outside directors and two outside Audit & Supervisory Board members. In addition to attending meetings of theBoard of Directors, the outside directors serve as members of the Nomination Committee and the Remuneration Committee, enabling themto provide supervision with an independent point of view, thereby helping to reinforce DIC’s corporate governance. The two outside Audit &6XSHUYLVRU\%RDUGPHPEHUV²RQHDQDWWRUQH\VSHFLDOL]LQJLQFRUSRUDWHODZDQGWKHRWKHUDFHUWL¿HGSXEOLFDFFRXQWDQW²DGYLVHPDQDJHPHQW
of the DIC Group from an expert, multifaceted and independent perspective, thereby helping to reinforce the auditing function.
2Standards Used to Evaluate the Independence of Outside Directors and Outside Audit & Supervisory Board Members

DIC has established standards for evaluating the independence of individuals appointed to the position of outside director or outside Audit &Supervisory Board member, which are shown below. DIC’s outside directors and outside Audit & Supervisory Board members are individuals
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independence of directors/audit & supervisory board members set by the Tokyo Stock Exchange.

DIC Report 201941

Corporate GovernanceIndependence Standards for Outside OfÀcers
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2. Individuals to whom any of the following items have applied in the preceding three years:❶ $SULQFLSDOEXVLQHVVSDUWQHURIWKH',&*URXS DEXVLQHVVSDUWQHUZLWKZKLFKWUDQVDFWLRQVLQDVLQJOH¿VFDO\HDUH[FHHGRI
WKH',&*URXS¶VFRQVROLGDWHGQHWVDOHVLQWKDW\HDU RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WRZKLFKWKLVGHVFULSWLRQDSSOLHV
❷ An individual for which the DIC Group is a principal business partner (a company with which the DIC Group’s transactions in aVLQJOH¿VFDO\HDUH[FHHGRIWKHFRPSDQ\¶VFRQVROLGDWHGQHWVDOHVLQWKDW\HDU RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WR
which this description applies❸ $VKDUHKROGHUZKRKROGVRUPRUHRIYRWLQJULJKWVLQ',&RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WRZKLFKWKLVGHVFULSWLRQDSSOLHV❹ $SULQFLSDOOHQGHUWRWKH',&*URXS DOHQGHUIURPZKLFKORDQVLQDVLQJOH¿VFDO\HDUH[FHHGVRIWKH',&*URXS¶VWRWDOORDQVLQWKDW\HDU RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WRZKLFKWKLVGHVFULSWLRQDSSOLHV❺ $QLQGLYLGXDOZKRKDVUHFHLYHGFRQWULEXWLRQVLQDVLQJOH¿VFDO\HDUWKDWH[FHHGVPLOOLRQRUEHORQJVWRDJURXSWRZKLFKWKLV
description applies❻ An accounting auditor, an accountant who has served as an accounting auditor for the DIC Group or an individual who isDQHPSOR\HHSDUWQHURUDVVRFLDWHRIDQDXGLW¿UPWRZKLFKWKLVGHVFULSWLRQDSSOLHV❼ An individual to whom ❻DERYHGRHVQRWDSSO\EXWZKRKDVUHFHLYHGUHPXQHUDWLRQIURPWKH',&*URXSLQH[FHVVRIPLOOLRQ
in a single fiscal year as a provider or professional services, such as consulting, accounting or legal services, or anLQGLYLGXDOZKREHORQJVWRDJURXSWKDWKDVUHFHLYHGUHPXQHUDWLRQLQH[FHVVRIRILWVFRQVROLGDWHGQHWVDOHVLQWKDW\HDU
as compensation for professional services, such as consulting, accounting or legal services❽ A corporate executive of another company in the event that an executive officer of DIC is appointed to an outside officer
position at that company
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$QLQGLYLGXDOZKRVHWHUPLQRI¿FHDVDQRXWVLGHRI¿FHURI',&KDVH[FHHGHGHLJKW\HDUV
3

Framework for Supporting the Efforts of Outside Directors and Outside Audit & Supervisory Board Members

Prior to meetings of the Board of Directors, relevant materials are distributed to all directors, full-time Audit & Supervisory Board members, outside directors
and outside Audit & Supervisory Board members. In addition, directors bringing matters before the Board provide explanations in advance to outside
directors, while full-time Audit & Supervisory Board members provide explanations as necessary to outside Audit & Supervisory Board members.

| Other Initiatives to Enhance the Corporate Governance Organization
1

Composition of the Board of Directors

To enable the Board of Directors to resolve major operations-related issues, as well as
to facilitate the effective oversight of management, the Board of Directors comprises
outside directors, who maintain independence, and other individuals having a thoroughknowledge of the businesses of the DIC Group, with consideration given to ensuring abalance among necessary knowledge, experience and capabilities. In light of the DIC
Group’s global operations, DIC also strives to ensure diversity in the Board’s composition.
One member of the Board of Directors is female, as is one member of the Audit &Supervisory Board.

Composition of the Board of Directors

38.5%
61.5%

Composition of the Board of Directors and the Audit & Supervisory Board
In-house

Outside

Total

Percentage of outside
members

Directors

6

3

9

33.3%

Audit & Supervisory
Board members

2

2

4

50.0%

Total

8

5

13

38.5%

DIC Report 201942

Directors of DIC

Outside directors

Corporate Governance2

Remuneration for Executives

Remuneration for directors is determined by the Remuneration Committee, which takes into account prevailing market rates, and consistsof basic remuneration; bonuses, which are linked to consolidated operating results and the degree of achievement of individual targets; andVWRFNFRPSHQVDWLRQZKLFKLVEDVHGRQPHGLXPWRORQJWHUPRSHUDWLQJUHVXOWV'LUHFWRUVZKRVHUYHFRQFXUUHQWO\DVH[HFXWLYHRI¿FHUVDUH
eligible for bonuses and stock compensation. Other directors and outside directors are eligible for basic remuneration only. Remuneration
for Audit & Supervisory Board members consists of basic remuneration only and is determined through discussion involving all Audit &Supervisory Board members, in accordance with internal rules established by the Audit & Supervisory Board, with consideration given to
ensuring a balance with remuneration for directors and to prevailing market rates.
Remuneration for Directors and Audit & Supervisory Board Members in Fiscal Year 2018
Total remuneration
0LOOLRQVRI\HQ

Composition of remuneration
0LOOLRQVRI\HQ
Basic salary

Bonus

Stock
compensation

Number of directors and corporate auditors

Directors(excluding outside directors)

277

215

46

16

7

Audit & Supervisory Board members(excluding outside Audit & Supervisory
Board members)

60

60

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60

60

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6

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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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Supervisory Board members regarding, among others, self-evaluation and Board administration, responses to which were analyzed andHYDOXDWHGE\WKH%RDUGRI'LUHFWRUV$VDUHVXOWWKHHIIHFWLYHQHVVRIWKH%RDUGRI'LUHFWRUVZDVFRQ¿UPHGTo further improve the Board’s effectiveness, DIC recognizes the further enhancement of discussion regarding corporate strategy, including
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Risk Management
Basic Approach to Risk Management
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| Efforts to Encourage Awareness
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Risk Management

Risk Management Overview
Sustainability Committee● Sustainability Working Group

Promote awareness of the Group risk
management policy and system● Gather risk management–related information
and amass know-how● Create framework for information sharing anddecision making in the event of a crisis● Ensure effective media relations● Establish emergency contact network and procedures●●Management offramework for
promoting initiatives

Subsidiary governance working groups● BCP/Disaster Risk Reduction working groups
●

●

Risk
communications

Product division BCP managers

Crisismanagement

Reinforce ability to respond in the event of a crisis
Enhance initial response manual● Strengthen practical capabilities by conducting
site-specific scenario-based drills● Confirm/improve effectiveness of BCPs by conducting
BCP-focused joint product division–site drills● Enhance responsiveness by conducting task
force map- and secretariat map-based drills
●
●

Risk
Management Preventative

Abstract priority risks and use the PCDA cycle
for response measures to facilitate ongoingrisk reduction/prevention● Prepare/update crisis management rules
and manuals● Collect/store emergency supplies/equipment.
● Promote employee awareness of disasterprevention/mitigation●

risk management

Overseassafety measures

Prepare/update safety manuals for use overseas
Gather risk information overseas and prepare/update response procedures● Provide risk information to overseas bases● Prepare and distribute safety handbooks to employees taking
up overseas posts or embarking on overseas business trips● Provide training and establish emergency contact networks for
employees taking up overseas posts or embarking on overseas business trips● Conduct drills based on hypothetical scenarios to reinforce
quick response capabilities
●

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activities

en

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Risk categories

Main risk owners

Risks that should be dealt with by relevant departments● 3URGXFWGLYLVLRQV
● 3URGXFWLRQPDUNHWLQJDQG

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Risks that should be dealt with by specialized departments

Corporate risk
management
activities

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Risks beyond control
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Risk Map䖃

19 Priority Risks for which Response Measures Have Been Adopted
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the aggregated results of a risk
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response measures and manages the
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December (prior year): Risk survey questionnaires are completed by executives→ A risk map is created
January: Priority risks and risk owners are determined→ Risk owners formulate response measures
February: A list of response measures is prepared(an explanation of the list is provided to the Sustainability Committee)

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Possible negative impacts

Principle response measures

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implement responses.

DIC Report 201946

CompleteRisk Management| Initiatives to Strengthen Governance at Subsidiaries
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| Framework for Supporting the Management of Subsidiaries$VDQRUJDQL]DWLRQZLWKJOREDORSHUDWLRQV',&KDVZRUNHGFRQWLQXRXVO\WRFUHDWHLQWHUQDOFRQWUROVV\VWHPVDQGHVWDEOLVKJRYHUQDQFHFRQ¿JXUDWLRQVIRULWVVXEVLGLDULHVDURXQGWKH
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EHLQJWDNHQWRFODULI\DQGVHWGRZQVWDQGDUGVIRUWKHVHJUHJDWLRQRIGXWLHVDQGWKHGHOHJDWLRQRIDXWKRULW\WRDVVLVWThemes Guiding Efforts to Strengthen
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174 Subsidiaries and Affiliates❹ ,PSOHPHQWPHDVXUHVWKDWKHOSVXEVLGLDULHVHQVXUHUDWLRQDOIURQWOLQHRSHUDWLRQV6XFKPHDVXUHVLQFOXGH
① Enhance the visibility of Group governance systems
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② Ensure appropriate behavior by subsidiaries’ boards of directors
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③ Ensure appropriate behavior by subsidiaries’ executives
operating levels.
7KHHVWDEOLVKPHQWRIPDQDJHPHQWVWDQGDUGVIRUVXEVLGLDULHVLQ-DSDQUHJDUGLQJWKHVHIRXUWKHPHVZDVFRPSOHWHGLQILVFDO\HDU7KHSURJUHVVRIUHODWHGLQLWLDWLYHVLVLQVSHFWHG',&EHJDQH[SDQGLQJWKHDSSOLFDWLRQRIWKHVHVWDQGDUGVWRRYHUVHDVVXEVLGLDULHVLQ¿VFDO\HDUDQGLVFXUUHQWO\ZRUNLQJWRUHGXFH
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of these standards.

④ Implement measures that help subsidiaries ensure rational
front-line operations

The DIC WAY| Responding to New Laws and Regulations
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Directors, Audit & Supervisory Board Members and Executive Officers(As of May 2019)| Directors

1

Chairman of the Board of Directors

Yoshiyuki Nakanishi

3

Representative Director

Masayuki Saito
Director

5 Director

7

Hideo Ishii

Kazuo Tsukahara Kuniko Shouji

2 Representative Director

4

Kaoru Ino

Yoshihisa Kawamura Toshifumi Tamaki

6

Director

8

Director*

Director*

9

Director*
8

6

5

7

9

* Outside

Yoshiaki Tamura

3

1

2

4

| Audit & Supervisory Board Members
1

Audit & Supervisory Board Member

Yoshiyuki Mase
2

Audit & Supervisory Board Member

Hiroyuki Ninomiya
3

Audit & Supervisory Board Member*

Katsunori Takechi
4

Audit & Supervisory Board Member*Michiko Chiba* Outside3

1

2| Outside Director ProÀles
Kazuo Tsukahara

Kuniko Shouji| Outside Audit & Supervisory Board Member ProÀles
Katsunori Takechi

April 2008 Director and Managing Executive Officer, IHI Corporation
April 2012 Representative Director and Executive Vice President, IHI Corporation
June 2014 Advisor, IHI Corporation

June 2004 Executive Officer, Terumo Corporation
June 2010 Director and Senior Executive Officer, Terumo Corporation
June 2017 Advisor, Terumo Corporation

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

Yoshiaki Tamura

Michiko Chiba

January 2007 Executive Officer, Asahi Glass Co., Ltd.
March 2013 Representative Director and Executive Vice President, Asahi Glass Co., Ltd.
March 2017 Executive Fellow, Asahi Glass Co., Ltd.

October 1989 Joined Showa Ota & Co. (currently, Ernst & Young ShinNihon LLC)
July
2010 Senior Partner, Ernst & Young ShinNihon LLC
September 2016 Founded Chiba Certified Public Accountant Office

DIC Report 201948

4

| Executive OfÀcers

President and CEO

Executive Vice PresidentManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Kaoru Ino

Masayuki Saito

Kazunari Sakai

Hideo Ishii

Masami Hatao

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

General Manager,
Technical Management Unit

President, Packaging & Graphic
Business Group

President, Color & Display BusinessGroup
General Manager, Display Material
Products Div.

Managing Executive Officer

Managing Executive Officer

Toshifumi Tamaki

Naoyoshi Furuta

Managing Executive Officer

Managing Executive Officer

Executive Officer

Masaya Nakafuji

Kazuo Hatakenaka

Rudi Lenz

Head of Corporate Strategy Unit
In Charge of Kawamura Memorial DIC
Museum of Art

General Manager, Production
Management Unit

Head of General Affairs and Legal Unit
In Charge of Diversity

President, Functional Products
Business Group
General Manager, Performance
Material Products Div.

Vice Chairman of the Board,
Sun Chemical Corporation

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Shinsuke Toshima

Taihei Mukose

Kiyotaka Kawashima

Masanobu Mizukoshi

President and CEO,DIC Graphics Corporation

Chairman, DIC (China) Co., Ltd.
Chairman, DIC (Shanghai) Co., Ltd.

Head of Purchasing and Logistics &Information Systems Unit

General Manager,
R&D Management Unit
General Manager,
Central Research Laboratories

General Manager,
Composite Material Products Div.

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Paul Koek

Myron Petruch

Takeshi Asai

Koji Asada

Masahiro Kikuchi

Managing Director,
DIC Asia Pacific Pte Ltd

President and CEO,Sun Chemical Corporation

General Manager,
Corporate Planning Dept.
In Charge of Osaka Branch andNagoya Branch

Head of ESG Unit

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

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Masamichi Sota

Yuji Morinaga

Shuji Furuta

Kiyofumi Takano

Yoshinari Akiyama

General Manager,
Printing Material Products Div.
General Manager, Packaging & Graphic
Business Planning Dept.

General Manager,
Packaging Material Products Div.

Head of Finance and Accounting Unit

General Manager,
New Business Development
Headquarters

General Manager,
Color Material Products Div.

Koji Tanigami

DIC Report 201949

Overview of Sustainability
In line with its basic sustainability policy, the DIC Group promotes a variety of sustainability initiatives worldwide and works to maintain an accurate
JUDVSRIVRFLDOLPSHUDWLYHVSHUWDLQLQJWR(6*UHODWHGLVVXHV

Sustainability Report
Amid rising environmental concerns, including climate change, and increasingly urgent social imperatives, companies today face an ever-morediverse array of challenges, including rising awareness of the need to achieve sustainability in a manner that takes into account the environment,
ecosystems and socioeconomic issues. The DIC Group launched its corporate social responsibility (CSR) program in fiscal year 2007. Having
IXUWKHUFODUL¿HGWKHRYHUDOOGLUHFWLRQRIUHODWHGLQLWLDWLYHVDV³VXVWDLQDEOHJURZWK´HIIHFWLYHIURP¿VFDO\HDUWKH*URXSFKDQJHGWKHGHVLJQDWLRQ
XVHGDFURVVLWVSURJUDPIURP³&65´WR³VXVWDLQDELOLW\´,Q¿VFDO\HDU',&HVWDEOLVKHGWKH(6*8QLWDVSHFLDOL]HGGHSDUWPHQWWRIXUWKHUH[SDQG
*URXS(6*LQLWLDWLYHVZRUOGZLGH,QOLQHZLWKLWVEDVLFVXVWDLQDELOLW\SROLF\WKH',&*URXSSURPRWHVDYDULHW\RIVXVWDLQDELOLW\LQLWLDWLYHVZRUOGZLGHDQGZRUNVWRPDLQWDLQDQDFFXUDWHJUDVSRIVRFLDOLPSHUDWLYHVSHUWDLQLQJWR(6*UHODWHGLVVXHVBasic Sustainability Policy（3DUWLDOO\UHYLVHGLQ0DUFK）The DIC Group is dedicated to conducting its business while retaining a strong commitment to five key concepts: preserving safety
and health, managing risks, ensuring fair business practices and respect for diversity and human rights, maintaining harmony withthe environment and advancing its protection, and creating value for society through innovation and contributing to ongoing economic
growth. DIC Group employees will continue working to deliver the value that its stakeholders—including its customers, suppliers, local
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Notes: :LWKWKHDLPRIHQVXULQJWKDWLWUHPDLQVDJOREDOO\WUXVWHGFRUSRUDWHFLWL]HQZLWKDSURXGUHSXWDWLRQLQ'HFHPEHUWKH',&*URXSEHFDPHDVLJQDWRU\WRWKH81*&7KH*URXSDOVRWDNHVWKHJXLGHOLQHVSURYLGHGE\,62WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ¶VVWDQGDUGIRUVRFLDOUHVSRQVLELOLW\LQWRDFFRXQWLQFRQGXFWLQJLWVRSHUDWLRQV 7KH JOREDO FRPPXQLW\ WRGD\ UHFRJQL]HV WKH SURPRWLRQ RI (6* PDQDJHPHQW ZKLFK VHHNV WR EDODQFH VXVWDLQDEOH HFRQRPLF JURZWK DQG WKH UHVROXWLRQ RI VRFLDO
LPSHUDWLYHVDVFULWLFDO7KLVLVHYLGHQFHGE\WKHIDFWWKDWFRXQWULHVZRUOGZLGHKDYHUDWLILHGWKH3DULV$JUHHPHQWDQGWKH6'*VERWKRIZKLFKZHUHDGRSWHGLQ

| Sustainability Framework and Themes
Themes7RIRVWHUFRQFUHWHPHDVXUHVLQ¿VFDO\HDUWKH',&*URXSLGHQWL¿HGNH\WKHPHVDVDIUDPHZRUNIRULPSOHPHQWLQJLWV&65SURJUDP
6XEVHTXHQWO\WKH*URXSSDUWLDOO\UHYLVHGWKHVHWKHPHVLQUHVSRQVHWRFKDQJHVLQWKHH[WHUQDOHQYLURQPHQWDQGWKHSURJUHVVRILWVHIIRUWV
7RGD\WKH*URXS¶VVXVWDLQDELOLW\IUDPHZRUNFRPSULVHVNH\WKHPHVZKLFKDUHFDWHJRUL]HGDVEDVLFWKHPHVWKHPHVWKDWGHPRQVWUDWHXQLTXHFDSDELOLWLHVDQGWKHPHVWKDWFRPELQHHOHPHQWVRIWKHSUHYLRXVWZRFODVVL¿FDWLRQV7KH*URXSLPSOHPHQWVDEURDGUDQJHRIJOREDOLQLWLDWLYHVWKDW
WDNHLQWRDFFRXQWLWVUHVSRQVLELOLW\WRHQVXUHSURSHUSURGXFWVWHZDUGVKLSDVZHOODVLWVSRVLWLRQDVDOHDGLQJPDQXIDFWXUHURI¿QHFKHPLFDOVThemes that demonstrateunique capabilities (A)Business models that respond to social imperatives
New technology development and value creation
Harmony with the community and social contributions
Communication with stakeholders

Core and category-specific themes
Themes that combine
elements of (A) and (B)Environment, safety and health
Quality
Human resources management
Sustainable procurement

Basic
Basic
(B))
themes(BthemesComplianceBusiness continuity management (BCM) and crisis management
Information security()

Deployment,QOLQHZLWKLWVEDVLFVXVWDLQDELOLW\SROLF\WKH',&*URXSKDVIRUPXODWHGPHGLXPWHUP ¿VFDO\HDUV± SROLFLHVDQGFUHDWHVDQQXDODFWLYLW\plans for each of these themes. The Group makes use of the PDCA cycle in promoting initiatives and reports on its achievements annually in the
DIC Report. Individual product divisions, business groups, sites, and overseas and domestic DIC Group companies are charged with pursuing
HIIHFWLYHVXVWDLQDELOLW\SURJUDPVE\IRUPXODWLQJWKHLURZQDQQXDODFWLYLW\SODQVEDVHGRQWKH*URXS¶VSODQDVZHOODVZLWKHQVXULQJWKDWWKH*URXS¶VSROLFLHVSHUPHDWHWKHLURUJDQL]DWLRQVDQGODERUIRUFHVDQGOLQNLQJVXVWDLQDELOLW\LQLWLDWLYHVWREXVLQHVVWDUJHWVDIC Report 201950

| System for Promoting Sustainability Initiatives

Members of the Sustainability Committee

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centers on the Sustainability Committee, which answers directly to
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status of sustainability themes, as well as with proposing policies andprograms for advancing sustainability and deliberating on critical related
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implementation of concrete strategies for promoting sustainability.

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żFormulates Groupwide targets and activity plansżDeliberates medium-term policiesżEvaluates sustainability initiatives

Board of Directors

Sustainability Committee
Sustainability
Strategy
Working Group

Sustainability
Working Group

President and CEO

Departments/
divisions in chargeżFormulates practical activity plansżPromotes sustainability themes

Sustainability
Department

Product divisions,
New Business Development Headquarters,
Production Management Unit,
Technical Management Unit,
R&D Management Unit,
headquarters’ administrative units, sites,
domestic and overseas Group companies

Sustainability themesżPromotes sustainability(Coordinates and supports initiatives)żAdvances awareness of sustainabilityżServes as secretariat to the Sustainability CommitteeżServes as secretariat to the Sustainability Working Group| Ensuring DIC Remains a Globally Trusted Corporate Citizen with a Proud Reputation

Leveraging Its Position as a Global Manufacturer of Fine Chemicals to Support the UNGC
Seeking to fulfill its responsibilities as a member of the international community in a more proactive manner, in'HFHPEHUWKH',&*URXSSOHGJHGLWVVXSSRUWIRUWKHSULQFLSOHVSXWIRUWKE\WKH8QLWHG1DWLRQV 81 DQG
EHFDPHDVLJQDWRU\WRWKH8QLWHG1DWLRQV*OREDO&RPSDFW 81*& ,QDXJXUDWHGLQWKH81*&LVDYROXQWDU\LQLWLDWLYHIRUFRPSDQLHVWKDWVHHNWRDFKLHYHVXVWDLQDEOHGHYHORSPHQW&RPSDQLHVDQGRUJDQL]DWLRQVZRUOGZLGHKDYHSOHGJHGWKHLUVXSSRUWIRUWKH81*&LQWKHEHOLHIWKDWJOREDOVXVWDLQDEOH
GHYHORSPHQWLVSRVVLEOHLIFRPSDQLHVDOLJQWKHLUEXVLQHVVSUDFWLFHVZLWKDQGIXO¿OOWKHLUVRFLDOUHVSRQVLELOLWLHVLQ
globally accepted principles in the areas of human rights, labor, the environment and the prevention of corruption.

Applying the Ten Principles of the UNGC
The DIC Group Code of Business Conduct conforms with
WKH7HQ3ULQFLSOHVRIWKH81*&7KH*URXSLVFDSLWDOL]LQJ
on its participation in this program to advance its operations
around the world, while at the same time giving evergreater consideration to the environment and human rights,
with the aim of ensuring sustainability for global society.

Ten Principles of the UNGC (OfÀcial Version)
Human rights

Labour3ULQFLSOH

Businesses should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2

make sure that they are not complicit in human rights abuses.

Principle 3

Businesses should uphold the freedom of association and effective
recognition of the right to collective bargaining;

3ULQFLSOH

the elimination of all forms of forced and compulsory labour;

3ULQFLSOH

the effective abolition of child labour; andPrinciple 6

the elimination of discrimination in respect of
employment and occupation.
Businesses should support a precautionary approach toenvironmental challenges;
undertake initiatives to promote greater environmental
responsibility; andencourage the development and diffusion ofenvironmentally-friendly technologies.
Businesses should work against corruption in all its forms,
LQFOXGLQJH[WRUWLRQDQGEULEHU\Principle 7

Environment

3ULQFLSOH
3ULQFLSOH

Complying with ISO 26000

Anti-corruption

3ULQFLSOH

7KH',&*URXSRSHUDWHVLQDPDQQHUWKDWLVFRQVLVWHQWZLWK,62UHOHDVHGLQ1RYHPEHUZKLFKSURYLGHVEXVLQHVVHVDQG
RUJDQL]DWLRQVJXLGHOLQHVIRURSHUDWLQJLQDVRFLDOO\UHVSRQVLEOHPDQQHUDIC Report 201951

Themes

DIC Sustainability Themes

Relevant UN Sustainable Development Goal (SDG) Icons

Business models that respond tosocial imperatives

Themes that
demonstrate uniquecapabilities (A)SDGs

Goals 8, 9 and 11

SDGs

Goals 9 and 12

SDGs

Goals 3 and 4

SDGs

Goal 17

SDGs

Goals 3, 6, 7, 12, 13, 14 and 15

SDGs

Goals 3, 4, 5, 8 and 10

SDGs

Goal 12

SDGs

Goal 16

New technology development andvalue creation

Harmony with the community andsocial contributions

Communication with stakeholders

Environment, safety and healthCore andcategory-speciÀc
themes(Themes that combine
elements of (A) and (B))

Quality
Human resources management

Sustainable procurement

Compliance

Basic themes (B)BCM・Crisis Management
Information security

The 2030 Agenda for Sustainable Development$WWKH816XVWDLQDEOH'HYHORSPHQW6XPPLWLQ6HSWHPEHU
DSURSRVDOWLWOHG³7UDQVIRUPLQJRXUZRUOGWKH
$JHQGDIRU6XVWDLQDEOH'HYHORSPHQW´ODWHUVXPPDUL]HG
as the SDGs, was adopted with the participation of
PRUHWKDQ81PHPEHUVWDWHV7KHDJHQGDZKLFKsucceeded the Millennium Development Goals (MDGs),
HQFRPSDVVHVJRDOVDQGWDUJHWV$OO81PHPEHUVWDWHVDUHH[SHFWHGWRPRELOL]HHIIRUWVWRDWWDLQWKH
goals, essential to sustainable development for the planet,by 2030. The DIC Group pledges to contribute through its
business activities to the success of the SDGs.
)RUPRUHLQIRUPDWLRQRQWKH SDGs, please visit:
WEB http://www.un.org/sustainabledevelopment/sustainable-development-goals/

DIC Report 201952

Materiality Analysis
7KH',&*URXSUHFHQWO\RQFHDJDLQDEVWUDFWHGDQGDQDO\]HGPDWHULDOLVVXHVWKDWLVLVVXHVZLWKWKHSRWHQWLDOWRQHJDWLYHO\DIIHFWLWVSHUIRUPDQFHDQGKDVLGHQWL¿HGWKRVHRISDUWLFXODUVLJQL¿FDQFH*XLGHGE\LWVQHZPHGLXPWHUPPDQDJHPHQWSODQ',&DQGE\LWVORQJWHUPJURZWKVFHQDULRWKH*URXSZLOOFRQWLQXHZRUNLQJWRHQVXUHWKDWWKHVHHIIRUWVDUHEHQH¿FLDOWRWKHPDQDJHPHQWRILWVEXVLQHVVHV

Materiality Analysis Process1

Abstraction of Issues',&KDVDEVWUDFWHGPDWHULDOLVVXHVRISDUWLFXODUVLJQL¿FDQFHWRWKH',&*URXSEDVHGRQDPRQJRWKHUVWKH*5,¶V*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHVLVVXHVGHOLQHDWHGLQ',&DQGSULQFLSDOULVNVDQGRSSRUWXQLWLHV
2Materiality Analysis

Sustainability Committee members, heads of departments that spearhead the implementation of initiatives related to sustainability themes,
VLWHJHQHUDOPDQDJHUVDQGVHQLRUPDQDJHPHQWIURP*URXSFRPSDQLHVLQWKH8QLWHG6WDWHV$VLDDQGHOVHZKHUHDVVHVVHGDEVWUDFWHGLVVXHV
from the perspectives of importance to DIC Group businesses and importance to stakeholders. Based on the results of this process, and of
H[WHQVLYHVXEVHTXHQWGHOLEHUDWLRQVE\WKH6XVWDLQDELOLW\:RUNLQJ*URXSDQGWKH6XVWDLQDELOLW\&RPPLWWHHLVVXHVRISDUWLFXODUVLJQL¿FDQFHWR
the Group were determined.
As a result of this process, issues of fundamental importance to DIC Group businesses, including occupational health and safety, respect for
KXPDQULJKWVDQGFRPSOLDQFHDUHSUHVHQWHGVHSDUDWHIURPWKH',&*URXS¶VPDWHULDOLW\PDWUL[テーマ(a) Importance to DIC Group businesses

Issues were assessed for potential to negatively affect the DIC Group now or in the future, with consideration given to both risks andbusiness opportunities.
7KH',&*URXSUHFRJQL]HVIRXUPDMRUH[WHUQDO
stakeholder groups (customers, suppliers, local
communities and society, and investors). Issues
ZHUHH[DPLQHGLQWHUPVRIERWKOHYHORILQWHUHVWRQ
the part of stakeholders and potential impact. Key
FULWHULDIURPH[WHUQDODVVHVVPHQWRUJDQL]DWLRQV
(the Dow Jones Sustainability Indices (DJSI),)76( 06&, WKH 6XVWDLQDELOLW\$FFRXQWLQJ
6WDQGDUGV%RDUG 6$6% RIWKH8QLWHG6WDWHVDQG
Sustainalytics) were also referenced, adding an
REMHFWLYHSHUVSHFWLYH

The DIC Group’s Materiality Matrix',& KDV RUJDQL]HG WKH LVVXHV DEVWUDFWHG DQG
DVVHVVHG WKURXJK WKH SURFHVV DERYH LQWR 
general materiality categories. The materialityof these issues was scored and a materiality
PDWUL[FUHDWHGE\SORWWLQJWKHVFRUHVXVLQJWZR
scales, i.e., importance to stakeholders andimportance to DIC Group businesses. In May WKLV PDWUL[ WRJHWKHU ZLWK WKH VHSDUDWH
issues of fundamental importance to DIC Groupbusinesses, were approved by the Sustainability&RPPLWWHHDQG¿QDOL]HGThe DIC Group’s Materiality Matrix
Very
high

●
●

●
●
●
●

Importance to stakeholders(b) Importance to stakeholders

●
●
●
●
●

Management of water resources
Contribution to local communities
Reputation-related risks
Response to tax-related risks
Management of work outsourced
to subcontractors●●●

Strengthening of partnerships
Reduction of environmental impact(emissions into air and water)
Digital transformation
Food safety
Response to a circular economy
Communication with customers andmarkets

Promotion of diversity
Realization of colorful andcomfortable lifestyles
Business continuity(Business continuity planning(BCP))

●

●
●
●

●

●
●
●
●

●

●
●

Efforts to enhance employee
satisfaction/fulfillment
Promotion of open innovation
Intellectual property strategies●●

Transformation to a sustainablebusiness structure
Product stewardshipResponse to climate change
Efforts to strengthen productdevelopment capabilities andcreate new businesses

Response to changes in environmental
laws and regulations
Promotion of sustainable procurement
Ability to maximize capital efficiency
Governance at subsidiaries
Information security

Human resource development
and securing employment
Addition of depth to and expansionof basic technologies

High
High

Importance to DIC Group businesses

Issues of fundamental importance to DIC Group businesses
Security and disaster prevention, occupational safety and healthRespect for human rights Compliance Product/manufacturer’s liability
Quality management Political and geopolitical change

DIC Report 2019

53

Very
high

Compliance

SDGs Goal 16

Toward Fair and Transparent Corporate Activities
Goals and Achievements of Major Initiatives
Objectives of initiatives

Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work

Goals for fiscal year 2018

Achievements in fiscal year 2018

Evaluation

Goals for fiscal year 2019

Enhance awareness of compliance.

• Compliance e-learning focused oninternational antitrust legislation and• Achieve target for percentage of
employees participating in the e-learning insider trading. The percentage of
employees participating exceeded 95%.
program (95%).
• Implement compliance- and governance- • Follow-up presentations regarding
the DIC Group Code of Conduct wererelated legal training in Japan, the Asia–
held in the PRC, Singapore, Thailand,
Pacific region and Greater China.
Malaysia and India.

★★

• Achieve target for percentage of employees
participating in the e-learning program(95%).
• Provide training on legal issues for DIC
executives (once), executives of Group
companies in Japan (once) and at
DIC Group companies in six countries
overseas.

Conduct business fairly.

Eliminate violations of antitrust and anticorruption laws.

Zero violations of antitrust andanti-corruption laws were reported.

★★

Achieve target of zero violations of antitrust
and anti-corruption laws.

Basic Approach to Compliance
Compliance in the DIC Group encompasses not only obeying laws but also acting in a manner that is in keeping with social norms and the expectations of customers, communities andRWKHUVWDNHKROGHUV:LWKWKHDLPRIHQVXULQJVXVWDLQDEOHJURZWKIRUEXVLQHVVHVWKDWDUHERWKIDLUDQGWUDQVSDUHQW',&IRUPXODWHGWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWDXQL¿HGVHWRI
guidelines the adherence to which it considers to be the foundation of compliance. DIC compels all DIC Group employees to conduct themselves in accordance with the code.

| The DIC Group Code of Business Conduct
The DIC Group completed the DIC Group Code of Business Conduct in July 2014. The code not only mandates compliance with national laws andinternational rules but also presents 10 principles essential to the professional conduct of DIC Group employees. The Group held presentations for all
existing Group employees at the time of release, while new employees receive training at point of hire. The goal of such training is to ensure employees
worldwide share values cherished by the Group and approach their responsibilities with a sense of responsibility and a commitment to doing the right thing.
,Q¿VFDO\HDUWKH*URXSKHOGIROORZXSSUHVHQWDWLRQVRQWKHFRGHLQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQDIC Group Code of Business Conduct WEB http://www.dic-global.com/en/csr/pdf/code_of_business_conduct_en.pdf

10 Principles Essential to Professional Conduct❶ Your Rights as an Employee: Respect, Dignity, Privacy❻ Your Relationship with Customers, Suppliers, and External Third Parties❷ Environment, Safety and Health❼ Money Laundering and Anti-Terrorism❸ <RXU5HVSRQVLELOLW\WR$YRLG3RWHQWLDO&RQÀLFWVRI,QWHUHVWDQGWR3URWHFW*URXS3URSHUW\❽ )RUFHG/DERU&KLOG/DERU&RQÀLFW0LQHUDOV❹ Anti-Corruption and Anti-Bribery Policy❾ Insider Trading❺ <RXU5HODWLRQVKLSZLWK*RYHUQPHQWVDQG*RYHUQPHQW2I¿FLDOV❿ Proper Accounting and Internal Controls Relating to Financial Reporting| Initiatives to Promote Compliance
The DIC Group promotes compliance through the following initiatives:❶ Training focused on legal issues to improve compliance awareness is provided for employees at point of hire, when promoted and before overseas

WUDQVIHUV,QDGGLWLRQZLWKWKHDLPRISURPRWLQJDZDUHQHVVRIWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWLQ¿VFDO\HDUHOHDUQLQJIRFXVHGRQ
international antitrust legislation and insider trading was provided. Training on legal issues was also provided once for DIC executives, once for executivesof Group companies in Japan and at DIC Group companies in four countries overseas (PRC, Singapore, Thailand and Malaysia).
❷ &RPSOLDQFHRI¿FHUVDUHDSSRLQWHGDWDOOUHJLRQDOKHDGTXDUWHUV²',&&RUSRUDWLRQ -DSDQ 6XQ&KHPLFDO&RUSRUDWLRQ $PHULFDVDQG(XURSH ',& &KLQD &R/WG 35& DQG',&$VLD3DFL¿F3WH/WG $VLDDQG2FHDQLD ²WRVSHDUKHDGJOREDOFRPSOLDQFHHIIRUWVThe DIC Group vows that it will not violate the principles of the DIC Group Code of Business Conduct, even if such a violation would
DSSHDUWRSUR¿WWKH*URXS$VDFRUSRUDWHFLWL]HQWKH*URXSDOVRSOHGJHVWRUHVSHFWVRFLDOQRUPVDQGDFWLQDVRXQGDQGVRFLDOO\DFFHSWDEOH
PDQQHU,Q¿VFDO\HDUWKHUHZHUHQRVHULRXVYLRODWLRQVRIFRPSOLDQFHODZVDIC Report 201954

Compliance| Establishing and Operating a Whistle-Blowing System
The DIC Group has established a compliance whistle-blowing system independent from channels for communication used in the conduct of business. This
V\VWHPHQFRPSDVVHVKRWOLQHVWKDWFDQKDQGOHUHSRUWVRIFRPSOLDQFHLVVXHVDQGTXHVWLRQVLQWKHODQJXDJHVRIPRUHWKDQFRXQWULHV7KH*URXSKDVDOVR
devised strict rules under this system to protect whistle-blowers from retaliation and works to ensure the system functions in a proper manner.
When a report is received, the Group responds swiftly and appropriately, giving due consideration to pertinent laws while also incorporating internal andexternal opinions, to identify and correct or where necessary take disciplinary action. Details of reports and steps taken in response are reported to theBoard of Directors. The Group will continue to use the whistle-blowing system to ensure the prompt discovery and correction of misconduct.

DIC Group
employees
Japan, other countries/
territories, regions

Asia-Pacific region

Greater China

Sun Chemical
Corporation

Director in charge of compliance, Legal Department
External legal firm

Legal Department
Whistle-Blowing Committee

Whistleblowing
hotlines

Legal Department
Whistle-Blowing Committee
General manager, Legal Department,
CEO, CFO| Antitrust and Anti-Corruption Legislation
The DIC Group has formulated a basic policy to comply with antitrust legislation and made Groupwide efforts to ensure fair business practices. The DIC*URXS&RGHRI%XVLQHVV&RQGXFWLQFOXGHVUXOHVIRUFRPSO\LQJZLWKDQWLWUXVWOHJLVODWLRQDQGSURKLELWVLQYROYHPHQWLQFRUUXSWLRQ6LQFH¿VFDO\HDUWKH
*URXSKDVKHOGPRUHWKDQSUHVHQWDWLRQVUHJDUGLQJDQWLWUXVWDQGDQWLFRUUXSWLRQOHJLVODWLRQIRUUHOHYDQWHPSOR\HHVWRHQVXUHVWULFWFRPSOLDQFHZLWKWKH
ODZVRIWKHFRXQWULHVLQZKLFKLWRSHUDWHV,Q¿VFDO\HDUDQHOHDUQLQJSURJUDPUHJDUGLQJLQWHUQDWLRQDODQWLWUXVWOHJLVODWLRQZDVLPSOHPHQWHGDW*URXSFRPSDQLHVLQ-DSDQWKH$VLD±3DFL¿FUHJLRQDQG*UHDWHU&KLQD7KHSHUFHQWDJHRIHPSOR\HHVSDUWLFLSDWLQJLQWKHHOHDUQLQJSURJUDPUHDFKHG

| Promoting Compliance with Legislation Regarding the Timely Payment of Subcontractors
With the aim of enhancing understanding of the importance of appropriate and fair transactions with subcontractors, the Legal Unit held presentations on
legislation regarding the timely payment of subcontractors for the purchasing departments of domestic DIC Group companies that incorporated case studies,and offered e-learning, principally for employees in charge of subcontractors. In addition, DIC has prepared the Manual for Internal Auditing of the DIC
Group’s Compliance with Japan’s Act Against Delay in Payment of Subcontract Proceeds, Etc., to Subcontractors and created a framework for conducting
DXGLWVLQDPRUHHI¿FLHQWPDQQHU7KH*URXSDOVRHQFRXUDJHVHPSOR\HHVLQUHODWHGSRVLWLRQVWRSDUWLFLSDWHLQSURJUDPVVSRQVRUHGE\H[WHUQDORUJDQL]DWLRQV
including a workshop promoting adherence to the Act sponsored by the Japan Fair Trade Commission and the Small and Medium Enterprise Agency.

| Taxation Compliance$PRXQWRI$FFUXHG7D[LQ)LVFDO<HDU

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of its businesses. The Group is also aware of risks associated with transfer price taxation andthe use of tax havens and of its obligation to pay appropriate taxes in the proper jurisdictions
as appropriate for its operations. The chart to the right shows a geographic breakdown of taxes
SDLGE\WKH*URXSLQ¿VFDO\HDU
The DIC Group’s Approach to Tax

WEB

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

DIC Report 201955

Overseas

7,052

Japan
Total

11,015（Millions of yen）

3,963

BCM and Crisis Management
Reducing Business Risks and Preventing the Recurrence of Incidents
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ = Still needs work
Objective of initiatives

Ensure the continuity of
DIC Group businesses.

Goals for fiscal year 2018

・Periodically revise BCPs andreinforce cooperation amongproduct divisions and sites.
・Reinforce corporate headquarters crisis management systemand promote safety measures
overseas.

Achievements in fiscal year 2018

Evaluation

・Effective responses to multiple natural
disasters were implemented in Japan.
・Joint product division–site BCP exercises wereconducted and BCP seminars were held.
・Seminars were held on an ongoing basis for
employees taking up new overseas posts
or embarking on overseas business trips.

★★★

Goals for fiscal year 2019
• Strengthen efforts to create a global crisis management configuration
Global: Promote the development of safety measures overseas throughlocal assessments and other efforts. Work to collect global risk information
and accumulate know-how.
Japan: Fortify crisis response capabilities by reinforcing the ability oftask forces to respond in the event of a crisis.
• Revise BCPs annually and reinforce cooperation among product divisions and sites.
Global and Japan: Encourage the ongoing sharing of information related
to BCP initiatives. Promote various awareness-enhancing measuresdesigned to strengthen cooperation among product divisions and sites.
• Reinforce awareness of the basic risk management policy and the risk
management system
Global and Japan: Encourage awareness of the risk management policy
and the risk management system. Continue to support efforts to improve
the risk management system and identify priority risks and formulate/implement response measures.Support efforts by Group companies topromote risk management.

Basic Approach to BCM and Crisis Management
Drawing on lessons from the Great East Japan Earthquake, the DIC Group now accounts for all risks with the potential to interrupt business continuity through BCM. TheseULVNVLQFOXGHQDWXUDOGLVDVWHUVVXFKDVODUJHHDUWKTXDNHVDQGÀRRGVLQÀXHQ]DDQGRWKHUSDQGHPLFVH[SORVLRQV¿UHVOHDNVDQGRWKHUIDFLOLW\DFFLGHQWVDQGPDMRUFRUSRUDWH
VFDQGDOV7KH*URXSFRPSUHKHQVLYHO\HVWLPDWHVWKHSUREDELOLW\RIHDFKULVNDQGLWVLPSDFWRQPDQDJHPHQWSULRULWL]LQJUHVSRQVHPHDVXUHVIRUPRUHVLJQL¿FDQWULVNV In-DSDQZKLFKLVFXUUHQWO\H[SHULHQFLQJDQDFWLYHSHULRGLQWHUPVRIYROFDQLFDQGVHLVPLFDFWLYLW\WKH*URXSGHSOR\VRQJRLQJQDWXUDOGLVDVWHUUHVSRQVHPHDVXUHVThese include maintaining headquarters’ functions and task force framework, support measures for disaster-stricken areas, and producing and revising BCPs for each
NH\SURGXFW7KH*URXSIDFLOLWDWHVDQGPDLQWDLQVDV\VWHPWRPDLQWDLQEXVLQHVVFRQWLQXLW\WKURXJKWUDLQLQJH[HUFLVHV
DIC’s Framework for Promotion| Framework for Promotion

The DIC WAY

Having prepared crisis management rules and manuals for use across the DIC*URXSLQWKHHYHQWRIDPDMRUGLVDVWHU',&KDVIRUPXODWHG%&3VIRULQGLYLGXDO
product divisions. To prevent BCPs from becoming empty formalities, the Group
works to identify issues and implement ongoing improvements through annual
WUDLQLQJDQGHPHUJHQF\UHVSRQVHH[HUFLVHV,QILVFDO\HDU',&ODXQFKHGD
review of BCPs based on social responsibility and customer imperatives with the aimof strengthening these plans. The Company completed the review process for all
SURGXFWGLYLVLRQVLQ¿VFDO\HDUDQGFRQWLQXHVWRSURPRWHDQQXDOXSGDWHV

Common across the DIC Group

Basic sustainability policy
Risk management policy

Rules for managing
emergency supplies

Rules for crisis management in
the event of a major natural orother disaster

Site and subsidiary rules/
regulations, firefighting plans, etc.
Site-specific

Task force manuals

BCM system manuals

Production division–specificGroup company–specific

Product division
BCP manuals| BCM in Fiscal Year 2018

Group company
BCP manuals$QXPEHURIQDWXUDOGLVDVWHUVVWUXFN-DSDQLQ¿VFDO\HDU3DUWLFXODUO\QRWDEOHDPRQJWKHVHZHUHWKH2VDND(DUWKTXDNHZKLFKVWUXFNQRUWKHUQ2VDND3UHIHFWXUHLQ
-XQHWRUUHQWLDOUDLQVLQVRXWKZHVWHUQ-DSDQLQ-XO\ RI¿FLDOO\FDOOHGWKH³+HDY\UDLQRI-XO\+HLVHL´ LQ-XO\DQGWKH+RNNDLGR(DVWHUQ,EXUL(DUWKTXDNHDQG7\SKRRQ-HELLQ
6HSWHPEHU,QHDFKLQVWDQFHDIIHFWHGVLWHVDVVHVVHGWKHH[WHQWRILPSDFWLQFOXGLQJFRQ¿UPLQJWKHVDIHW\RIHPSOR\HHVDQGWKHLUIDPLOLHVDQGDVFHUWDLQLQJGDPDJHEDVHGRQWKHLU%&3VDQGSURPSWO\LQIRUPHGFRUSRUDWHKHDGTXDUWHUV)RUWXQDWHO\WKHVHHYHQWVGLGQRWDIIHFWWKH*URXS¶VSURGXFWLRQRUVXSSO\DFWLYLWLHVDQGQRQHRILWVPDMRUFXVWRPHUVRUVXSSOLHUVVXIIHUHGPDMRUGDPDJH
$JDLQVWWKLVEDFNGURSWKH*URXSVWHSSHGXSHIIRUWVWRHQFRXUDJHDZDUHQHVVDPRQJDQGSURYLGHWUDLQLQJIRUVLWHDQG*URXSFRPSDQ\%&3RI¿FHUVLQ-DSDQ7RHQVXUHWKDW
%&3RI¿FHUVVKDUHWKHVDPHXQGHUVWDQGLQJRIEXVLQHVVULVNVDVZHOODVWRUHLQIRUFHUHFRJQLWLRQRIWKHQHHGWRDGGUHVVEXVLQHVVFRQWLQXLW\DVDQLQKHUHQWDVSHFWRIHYHU\GD\operations by encouraging the formulation of highly effective methods for countering various hypothetical crises—thereby enabling DIC to leverage limited resources to secure
VXSSO\FKDLQVDQGUHVWRUHVLWHVWRRSHUDELOLW\LQWKHDIWHUPDWKRIDPDMRUGLVDVWHU²',&RUJDQL]HGH[SHUWOHGZRUNVKRSVDQGPDSEDVHGVLPXODWLRQH[HUFLVHVIRUPDQDJHUVDQG
MRLQWSURGXFWGLYLVLRQ±VLWHH[HUFLVHV',&YHUL¿HGWKHUHVXOWVRIWKHVHLQLWLDWLYHVDQGXVHGLWV¿QGLQJVWRLGHQWLI\QHZLVVXHVDQGGHYLVHUHPHGLDOPHDVXUHVDIC Report 2019

56

BCM and Crisis Management

Site

BCP Training 3

BCP Training 2

BCP Training 5

Workshop

Joint product division–site exercise

Visiting BCP lecture(In operating order)

Onsite task force(Site damaged by disaster)

Crisis management framework(Chain of command)

Disaster!

Onsite task force(Affiliated company damaged by disaster)(Business task force)
Business task force

Corporate headquarters
task force

・Head (President and CEO)* Alternative as designated in productdivision BCP

Provisional headquarterstask force*In the event that corporate headquarters has lost ability to function

・Should corporate headquarters lose its ability to・Head (President and CEO)・Deputy head
(Executive officer in charge ofGeneral Affairs and HR)* Alternative: Corporate headquarters’ executive officer(Command is inherited in order of rank)function, a provisional headquarters task force shallbe established to fulfill corporate headquarters’ role at,in order of preference, the Tokyo Plant, the Chiba Plant,
the Saitama Plant or the Osaka Branch Office.
・Provisional corporate headquarters task force head
(General manager of pertinent site)

Group company(In operating order)

Need exists to have response strategy in place

Outline of Hypothetical Disaster Scenario–Based BCP Training

BCP Training 4

BCP Training 1

Map-based simulation exercise for task forces

Task force and provisional task force training(Held in Tokyo, Chiba, Saitama and Osaka)| Promoting Complementary Production Capabilities
7KH',&*URXSUHFRJQL]HVWKHQHHGWRHQVXUHLWFDQIXO¿OOLWVVXSSO\UHVSRQVLELOLWLHVLQWKHHYHQWRIGDPDJHWRIDFLOLWLHVIURPDPDMRUQDWXUDOGLVDVWHUDQG
WKXVLQFRUSRUDWHVWKLVSHUVSHFWLYHLQWRLWV%&3V2QHZD\LWGRHVVRLVWKURXJKFRPSOHPHQWDU\SURGXFWLRQFDSDELOLWLHV)RUH[DPSOHWKH6DLWDPD3ODQWLQ
Japan and Qingdao DIC Finechemicals Co., Ltd. in the PRC, both of which produce LC materials, have developed a common response manual that outlines
potential risks faced by each. In addition to holding regular response simulation sessions, the two facilities are currently developing a common BCP basedon the assumption that one will take over for the other if required. Group pigment production facilities have developed a framework that involves continuous
cooperation to plan emergency response measures.

BCP Initiatives• Emergency response manual• Response simulation sessions
Saitama Plant (Japan)

Qingdao DIC Finechemicals (PRC)

Complementary production
capabilities for LCs
Visiting BCP Lectures Conducted at Domestic Sites
With the aim of facilitating collaboration between sites and corporate headquarters to ensure effective responses in the immediate aftermath of a
K\SRWKHWLFDOQDWXUDOGLVDVWHULQ¿VFDO\HDUSURGXFWGLYLVLRQVUHYLHZHGWKHLU%&3V$VSDUWRIHIIRUWVWRSURPRWHDZDUHQHVVLQ¿VFDO\HDU
',&FRQGXFWHGYLVLWLQJ%&3OHFWXUHVDWNH\VLWHVLQ-DSDQ7KH',&*URXSSURGXFHVDZLGHUDQJHRIPDWHULDOVDQGFRPSRQHQWVWKDWFDQKDYHDVLJQL¿FDQWLPSDFWRQVRFLHW\LIVXSSOLHVDUHGHOD\HG)RUWKLVUHDVRQLQWKHHYHQWDSURGXFWLRQIDFLOLW\VXIIHUVGDPDJHGXHWRDGLVDVWHURURWKHUHYHQWLWLVFULWLFDOLQQRUPDOWLPHVWRPDLQWDLQDFRQ¿JXUDWLRQWKDWHQVXUHVRWKHUVLWHV GRPHVWLFSURGXFWLRQIDFLOLWLHVGRPHVWLFRYHUVHDV*URXSFRPSDQLHVRUVXEFRQWUDFWRUV FDQWHPSRUDULO\WDNHRYHUSURGXFWLRQRUSURYLGHEDFNXSDQGWKDWVXSSO\FKDLQIXQFWLRQVDUHVHFXUHGWRIDFLOLWDWHSURFXUHPHQWRIUDZPDWHULDOV$FFRUGLQJO\WKH*URXSUHFRJQL]HVWKHQHHGWR
ensure a common crisis awareness among divisions and departments, notably product divisions, in normal times. This depends on clarifying roles and
LQGLYLGXDOVLQFKDUJHFUHDWLQJDQHIIHFWLYHHPHUJHQF\FRQWDFWQHWZRUNDQGFRQGXFWLQJRQJRLQJH[HUFLVHVDLPHGDWLPSURYLQJUHVSRQVLYHQHVVXVLQJhypothetical scenarios.
DIC Report 201957

BCM and Crisis Management

Initiatives Aimed at Formulating More Effective BCPs',&UHFRJQL]HVWKHQHHGWRHQVXUHWKDWGLYLVLRQVDQGGHSDUWPHQWVVKDUHDFRPPRQFULVLVDZDUHQHVVWRHQVXUHWKHSURPSWUHVWRUDWLRQRIRSHUDWLRQVLQWKHHYHQWDSURGXFWLRQVLWHLVGDPDJHGDVWKHUHVXOWRIDGLVDVWHURURWKHUHYHQW,Q¿VFDO\HDUWKH&RPSDQ\RUJDQL]HG%&3OHFWXUHVIRU
SURGXFWGLYLVLRQVWDIIDVZHOODVIRUGRPHVWLF*URXSFRPSDQ\H[HFXWLYHVDQGJURXSOHDGHUVDQGFRQGXFWHG%&3IRFXVHGMRLQWSURGXFWGLYLVLRQ±VLWH
H[HUFLVHVDWVHYHQSULQFLSDOGRPHVWLFVLWHVPractical
responses

Progress of situation
Business as normal

Advance measures
Approach toadvancemeasuresOccurrence ofearthquake

Disaster!

Response framework(from initial response through restoration)(Emergency)

Initial response Responses to facilitate business continuity● Formulation of BCPs and manuals● Other advance measures(Preparations, earthquake-proofing of facilities, etc.)● Education and training

Anticipate how situation
will unfold post-disaster(Disaster and damage scenario)

9LVLWLQJ%&3OHFWXUH 2VDND%UDQFK2IILFH

Sites Where Visiting BCP Lectures Were
Conducted in Fiscal Year 2017Black: DIC sites
Blue: DIC Group sites

DIC Kitanihon Polymer
Hokkaido Plant

DIC Kitanihon Polymer Co., Ltd.
Gunma Plant

Tokyo Plant

Tatebayashi Plant

Hokuriku Plant

Utsunomiya Plant

Komaki Plant

Saitama Plant
Kashima Plant

Yokkaichi Plant

DIC Plastics, Inc. (Tatebayashi Plant)

Osaka Branch Office

Corporate headquarters
Sakai Plant

Kansai Plant

Chiba Plant
Nagoya Branch Office

DIC Kyushu
Polymer Co., Ltd.
Kyushu Branch Office,Q ILVFDO \HDU  ',& FRQGXFWHG %&3 OHFWXUHV DQG %&3IRFXVHG MRLQW SURGXFW GLYLVLRQ±
VLWHH[HUFLVHVIRUWKHVWDIIRIVHYHQVLWHVDQGVHYHQSURGXFWGLYLVLRQVZLWKWKHREMHFWLYHVRI
confirming the effectiveness of product division BCPs and ensuring a common understanding
E\SURGXFWGLYLVLRQVDQGVLWHV$VSDUWRIWKHMRLQWH[HUFLVHVVLWHVFRQGXFWHGGLVDVWHUSUHYHQWLRQ
DQGPLWLJDWLRQH[HUFLVHVEDVHGRQK\SRWKHWLFDOVFHQDULRVZKLOHSURGXFWGLYLVLRQVFRQGXFWHG
EXVLQHVVFRQWLQXLW\PDS±EDVHGVLPXODWLRQH[HUFLVHVZLWKDQHPSKDVLVRQEXVLQHVVFRQWLQXLW\,Q
DGGLWLRQ6XVWDLQDELOLW\:RUNLQJ*URXSPHPEHUVDVVHVVHGSURGXFWGLYLVLRQ%&3VWRFRQ¿UPWKHLU
effectiveness. These efforts were designed to avoid turning the BCP formulation process into amere formality, but rather to facilitate the creation of effective and genuinely practical BCPs.
DIC will continue to promote such efforts with the aim of enhancing initial responses in the eventof a disaster and of site restoration, complementary production, supplier management and regional
response strategies.

DIC Report 201958

0DSEDVHGVLPXODWLRQH[HUFLVH

BCM and Crisis Management

Sites Where Joint Product Division–Site
Exercises Were Conducted in Fiscal Year 2018Black: DIC sites
Blue: DIC Group sites

Gunma Plant

Hokuriku Plant
Komaki Plant

Tatebayashi Plant

DIC Plastics, Inc. (Tatebayashi Plant)
Kashima Plant
Chiba Plant

Saitama Plant| Conducting Emergency Response Exercises and Drills
7KH',&*URXSKDVGHYHORSHGDQGPDLQWDLQVDV\VWHPGHVLJQHGWRHQVXUHLWVDELOLW\WRPLQLPL]HGDPDJHLQWKHHYHQWRIDGLVDVWHUDVZHOODVWRHQVXUHWKH
VPRRWKUHVWRUDWLRQRIRSHUDWLRQV7KLVV\VWHPLQFOXGHVDZLGHUDQJHRIH[HUFLVHVDQGGULOOVLQFOXGLQJVDIHW\FRQ¿UPDWLRQGULOOVHPHUJHQF\UDGLRZDUQLQJGULOOVFRPSUHKHQVLYHGLVDVWHUGULOOVPDSEDVHGVLPXODWLRQH[HUFLVHVDQG%&3GULOOVBCP workshop at corporate headquarters

7DVNIRUFHPDS±EDVHGVLPXODWLRQH[HUFLVH

DIC Report 201959

BCP training at corporate headquarters

BCM and Crisis Management| Crisis Management
Efforts to Reinforce Safety Measures Overseas
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assigned to overseas posts or traveling overseas on business. With the rising frequency of terrorist acts, uprisings, kidnappings and other such
incidents in various locations, the Group is reinforcing safety measures designed to help employees evade danger. These include taking steps
to advance awareness among related individuals and reinforce corporate headquarters’ ability to respond effectively in an emergency situation
by establishing an emergency overseas contact network, providing risk information to overseas bases, distributing safety handbooks, providing
VDIHW\WUDLQLQJWRHPSOR\HHVSULRUWRWDNLQJXSQHZRYHUVHDVSRVWVRUHPEDUNLQJRQRYHUVHDVEXVLQHVVWULSVDQGFRQGXFWLQJH[HUFLVHVEDVHGRQ
hypothetical scenarios set forth in crisis management manuals.

Safety training for employees prior to taking up new overseas posts

Safety handbook for individuals
taking business trips overseas

Safety handbook for Company
representatives posted overseas

Safety training for individuals prior to traveling overseas on business

Comment DIC is promoting measures that will ensure sustainable safety for Japan-based employees when they are abroad.
(IIHFWLYHULVNPDQDJHPHQWLVLQGLVSHQVDEOHWRPHHWLQJWKHH[SHFWDWLRQVRIVWDNHKROGHUVZRUOGZLGHLQWRGD\¶VLQFUHDVLQJO\JOREDOFRUSRUDWH
society. We have been assisting DIC in formulating safety- and healthcare-related measures for its Japan-based employees when they go
RYHUVHDVVLQFH¿VFDO\HDU6LQFHWKHEHJLQQLQJ',&KDVZRUNHGDFWLYHO\WRFUHDWHDUREXVWIUDPHZRUNWKDWLVFDSDEOHRIUHVSRQGLQJWRZKDWHYHULVVXHVPLJKWDULVHDQGKDVWDNHQGHFLVLYHVWHSVZLWKDYLHZWRHQVXULQJHIIHFWLYHFRUSRUDWHJRYHUQDQFHDQGIXO¿OOLQJLWVREOLJDWLRQWRHQVXUHLWVHPSOR\HHV¶VDIHW\,Q¿VFDO\HDU',&SUHSDUHGYDULRXVKDQGERRNVDQGFRQGXFWHGWUDLQLQJVHVVLRQVIRUDSSUR[LPDWHO\
employees at four sites.
As this shows, DIC’s initiatives are not limited to the creation of a framework, but also focus on fostering a common crisis awareness on thefront lines. Such efforts to leverage the framework it has created are enabling DIC to promote measures that will ensure sustainable safety for its
Japan-based employees when they are abroad.
,Q¿VFDO\HDU',&ZLOOWDNHVWHSVWRVWUHQJWKHQLWVIUDPHZRUN7KH&RPSDQ\ZLOODOVRDSSO\WKLVIUDPHZRUNLQDPDQQHUWKDWUHVSRQGVWR
the needs of employees at sites around the world, thereby providing further support for its global business activities.
Senior Executive Advisor, Relo Panasonic Excel International Co., Ltd.

Hiromichi Tsuji| First-Ever Emergency Drill Simulating Ballistic Missile Launch$PLGULVLQJSROLWLFDOWHQVLRQVRQWKH.RUHDQ3HQLQVXODLQ6HSWHPEHU',&FRQGXFWHGLWV¿UVWHYHUHPHUJHQF\GULOOVLPXODWLQJWKHODXQFKRIDEDOOLVWLF
missile in the direction of Japan. The drill played out a scenario in which information has been received via Japan’s J-Alert emergency warning system that a
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&RPSDQ\¶VLQKRXVH¿UH¿JKWLQJVTXDGLVVXHGLQVWUXFWLRQVIRUHPSOR\HHVWRPRYHDZD\IURPZLQGRZVDQGWDNHFRYHUXQGHURUEHKLQGVROLGREMHFWV,QWKH
event of an unforeseen emergency, it is critical to remain calm and resist the urge to panic. The Sustainability Working Group assesses the effectiveness of
YDULRXVGULOOVLPPHGLDWHO\DIWHUZDUGDQGLQFRUSRUDWHVLWV¿QGLQJVLQWRVXEVHTXHQWGLVDVWHUSUHYHQWLRQSODQQLQJDrill in progress

Government-prepared awareness poster in thecorporate headquarters cafeteria

DIC Report 201960

BCM and Crisis Management| DIC Corporate Headquarters Emergency Pocket Books$SSUR[LPDWHO\HPSOR\HHVRIWKHSDUHQWFRPSDQ\DQGYDULRXVGRPHVWLF*URXSFRPSDQLHVZRUNDWWKHFRUSRUDWH
headquarters in Tokyo. DIC has prepared Emergency Pocket BooksSRFNHWVL]HGERRNOHWVWKDWSURYLGHLQVWUXFWLRQVRQ
appropriate actions—both autonomous and in cooperation with others—in the event of a disaster for distribution to these
employees and their families. The booklets also detail corporate headquarters’ overall emergency response framework and
WKHUHVSRQVLELOLWLHVRILQGLYLGXDOÀRRUVDQGGHSDUWPHQWVLQDQHPHUJHQF\VLWXDWLRQDVZHOODVSURYLGHVSDFHIRUHPSOR\HHV
DQGWKHLUIDPLOLHVWRSURYLGHFRQWDFWLQIRUPDWLRQ7KHFRPSDFWVL]HRIWKHERRNOHWVHQVXUHVSRUWDELOLW\Emergency Pocket Books| Training for Taking In Stranded Commuters in the Event of a Major Disaster
2QHRIWKHPRVWHDUWKTXDNHSURQHFRXQWULHVLQWKHZRUOG-DSDQKDVEHHQVWUXFNPXOWLSOHWLPHVE\GHYDVWDWLQJVHLVPLFDFWLYLW\$VDFRQVHTXHQFHHQVXULQJHDUWKTXDNHUHDGLQHVVWKDWLVWKHDELOLW\WRSUHYHQWDQGPLWLJDWHWKHLPSDFWRIHDUWKTXDNHVLVUHFRJQL]HGDVDFULWLFDOFKDOOHQJHIRUVRFLHW\DVDZKROH
7RN\R¶V1LKRQEDVKLGLVWULFWKRPHRI',&¶VFRUSRUDWHKHDGTXDUWHUVLVDQDUHDQRWHGIRULWVWLJKWO\FOXVWHUHGODUJHFRPPHUFLDOFRPSOH[HVDQGRI¿FHEXLOGLQJV(YHU\\HDUDFRPSUHKHQVLYHQHLJKERUKRRGGLVDVWHUGULOOLVFRQGXFWHGRQDQHPSW\ORWQHDUWKH',&%XLOGLQJ$SSUR[LPDWHO\SHRSOHWRRNSDUWLQWKHGULOOKHOGRQ
6HSWHPEHUWKHVFHQDULRIRUZKLFKZDVDQHDUWKTXDNHRIFORVHWRRQWKH-DSDQHVHVFDOHZLWKDQHSLFHQWHUGLUHFWO\EHORZDPDMRUXUEDQDUHDZKLFKLV
something that is predicted to happen in Tokyo at some time in the future. Guided by personnel from the Nihonbashi Fire Station, participants received training in¿UVWDLG $('XVHDQGKHPRVWDVLV SUDFWLFHGXVLQJ¿UHK\GUDQWVWRH[WLQJXLVK¿UHVDQGWRXUHGIDFLOLWLHVGHVLJQDWHGDVWHPSRUDU\VKHOWHUVIRUWKRVHVWUDQGHGDQGDQ
H[KLELWLRQRIUHOLHIWHQWVVHWXSE\WKH-DSDQHVH5HG&URVV6RFLHW\
The DIC Building, designed with state-of-the-art earthquake-resistant technologies, has been designated as a temporary shelter for stranded commuters in&KXR:DUGZKHUH1LKRQEDVKLLVORFDWHG$FFRUGLQJO\DQH[HUFLVHZDVFRQGXFWHGWKHVFHQDULRIRUZKLFKLQYROYHGWKHRSHQLQJRIWKH¿UVWÀRRUPDLQHQWUDQFHDUHD
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H[HUFLVHZKLFKDOVRLQFOXGHGLQVWUXFWLRQLQSURFHGXUHVIRUDPRQJRWKHUVUHFHLYLQJDQGJXLGLQJVKHOWHUXVHUVGLVWULEXWLQJUDWLRQVEODQNHWVPXOWLSXUSRVHSODVWLF
WKHUPDOVKHHWVDQGRWKHUHPHUJHQF\VXSSOLHVDQGSURYLGLQJ¿UVWDLGDQGLQIRUPDWLRQ,Q1RYHPEHU',&¶VFRUSRUDWHKHDGTXDUWHUVKRVWHGWKH'LVDVWHUVDQG&RPPXQLW\'LVDVWHU3UHYHQWLRQFRQIHUHQFHVSRQVRUHGE\WKH1LKRQEDVKL&RPPXQLW\'LVDVWHU3UHYHQWLRQ&RXQFLO2ZLQJWRLWVSUR[LPLW\WR7RN\R6WDWLRQ1LKRQEDVKLLVDEX]]ZLWKSHRSOHGD\DQGQLJKW$FFRUGLQJO\WKHSRWHQWLDOIRUGDPDJHIURPDQHDUWKTXDNHZLWKHSLFHQWHUVGLUHFWO\EHORZWKH7RN\RPHWURSROLWDQDUHDVXGGHQKHDY\GRZQSRXUVDQGPDMRUW\SKRRQVLVDVLJQL¿FDQWFRQFHUQ7KHREMHFWLYHRIWKH
FRQIHUHQFHZDVWRFUHDWHDV\VWHPWKDWZLOOKHOSPLQLPL]HGDPDJHLQWKHHYHQWRIDGLVDVWHUE\HQFRXUDJLQJFROODERUDWLRQEHWZHHQEXVLQHVVHVDQGORFDOUHVLGHQWV7KHFRQIHUHQFHZDVDWWHQGHGE\UHSUHVHQWDWLYHVRIQHLJKERUKRRGDVVRFLDWLRQVEXVLQHVVHVORFDOJRYHUQPHQWDQGWKH¿UHGHSDUWPHQWDQGLQFOXGHGOHFWXUHVE\
GLVDVWHUUHOLHIH[SHUWVDQGVSHDNHUVIURPQRQSUR¿WRUJDQL]DWLRQV 132V IRFXVLQJRQDPRQJRWKHUVGLVDVWHUSUHYHQWLRQV\VWHPVLQIRUPDWLRQFROOHFWLRQUHFRUGNHHSLQJDQGUHVSRQGLQJWRFKDOOHQJHVDVZHOODVDZRUNVKRSVW\OHGULOOXVLQJKD]DUGPDSV3DUWLFLSDQWVGLYLGHGLQWRWHDPVWRDGGUHVVWKHWDVNVWKH\ZHUHJLYHQ
underscoring the important role of the conference as an opportunity for reinforcing understanding of emergency response procedures.
DIC will continue to play an active role in community-based efforts to reinforce local disaster preparations. In doing so, the Company aims to help ensure Tokyo’s
UHDGLQHVVWRKDQGOHDPDMRUGLVDVWHU

([SODQDWLRQ WR GULOO SDUWLFLSDQWV
by Nihonbashi Fire Station
personnel

Emergency training in the use of
AEDs and hemostasis

7UDLQLQJLQWKHXVHRI¿UHK\GUDQWVWRH[WLQJXLVK¿UHV

DIC Report 2019

61([KLELW RI WHPSRUDU\ VKHOWHU IRUpeople stranded in Nihombashi

Japanese Red Cross Societ y
H[KLELWLRQRIUHOLHIWHQWVInformation Security
Initiatives to Ensure Information Security
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Establish a global information
security framework.

Goals for fiscal year 2018

Achievements in fiscal year 2018

・Reinforce network infrastructure based on
information infrastructure/BCPs designed toensure preparedness for natural disasters
and other issues.
・Complete Asia–Pacific region information
infrastructure/secure environment creation
project.
・Reinforce endpoint security.

・Efforts commenced to create an infrastructure
for the implementation of BCPs and to prepare
for the shift to cloud computing.
・Management framework for the Asia–Pacificregion information infrastructure/secure environment
creation project was completed.
・Steps were taken to update the information
security infrastructure with the aim of reinforcing
endpoint security in preparation for a shift toWindows 10.

Evaluation

Goals for fiscal year 2019★★

• Fortify response to the expanded use ofdigital technologies.
• Create a new information infrastructure
conducive to work style reforms, the further
use of mobile devices and the expansion of
global collaboration.
• Formulate and strengthen information
security rules and frameworks, provide
training and encourage awareness in amanner that responds to new information
security threats and risks.

Employeetraining/
drillsBasic Approach to Information Security
The DIC Group has positioned information security as a key
management priority and established a Basic Policy on Information
Security, which is founded on its recognition that protecting
information assets that belong to or are managed by the Group isessential to its ability to conduct business. In line with this policy,
DIC has formulated and implemented confidential information
management regulations and information management guidelines.
The DIC Group works to ensure that directors and employees
use the Group’s information assets appropriately in the courseof business and appropriately handle confidential information.
The Group also pursues continuous improvements by conducting
LQWHUQDODXGLWVWRFRQ¿UPFXUUHQWLVVXHVDQGLGHQWLI\ULVNV

Strengthening of
measures tocombat targetedcyber attacks

Further
improvements

Response to the
expanded use ofdigital technologies

Response to the shift tocloud computing

Basic Policy on Information Security
Basic policy
Confidential information management regulations
Preparation of
response measures
Information management guidelines
Implementation proceduresInternal audits| Globally Maintaining and Enhancing Information Security
The DIC Group’s approach to information security management rests on four pillars: Regulations and guidelines, management framework, infrastructure,
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Americas and Europe.
Regulations and Guidelines
The DIC Group continues to update its Basic Policy on Information Security, created in 2010, confidential information management regulations andinformation management guidelines regularly and as required to ensure its ability to address new security risks in a timely manner. The Group is also
implementing new regulations as appropriate in response to the increasing prevalence of digital technologies. In addition, the Group has establishedseparate rules for handling personal information and customer information in its information management guidelines, which it is working to disseminate
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The Information Security Committee meets twice annually to determine policies and procedures for information security in each area of the DIC Group’s
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management and handling of important everyday information. To ensure it is prepared in the unlikely event of an information security–related incident, theGroup has created a task force operational manual and periodically conducts training to ensure effective initial responses to incidents when they occur.

DIC Report 201962

Information Security

Infrastructure,QDGGLWLRQWRRQJRLQJLQLWLDWLYHVLQFOXGLQJWKHHDUO\LQVWDOODWLRQRIDQH[WJHQHUDWLRQ¿UHZDOOWRSURWHFWDJDLQVWWDUJHWHGF\EHUDWWDFNVE\WKLUGSDUWLHV',&KDV
taken decisive steps to fortify its information security infrastructure to accommodate integration with the IoT, the expanded use of cloud computing and othernew technologies, thereby reinforcing its management foundation.
,Q¿VFDO\HDU',&FRPSOHWHGGHSOR\PHQWRIDQLQIRUPDWLRQLQIUDVWUXFWXUHVHFXUHHQYLURQPHQWFUHDWLRQSURMHFWLQLWLDOO\LPSOHPHQWHGLQWKH35&DQG
6RXWKHDVW$VLD ¿VFDO\HDUV± LQWKH5HSXEOLFRI.RUHD 52. DQG7DLZDQ
Employee Education and Training
6LQFH¿VFDO\HDUWKH',&*URXSKDVRIIHUHGDQDQQXDOHOHDUQLQJLQIRUPDWLRQVHFXULW\SURJUDPWRHPSOR\HHVLQ-DSDQDQGHOVHZKHUHLQ$VLD7KH
percentage of eligible employees participating in this e-learning program is currently 90%. The Group also provides information security training for
employees in the Americas and Europe and works to promote awareness of the DIC Group’s security policy, regulations and information infrastructure, andof effective ways to address new security threats and challenges associated with social media.

Comment As a business partner, this is my take on DIC’s information security initiatives.
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VSHFL¿FHIIRUWKDVLQYROYHGWKHDVVHVVPHQWRIFXUUHQWFDSDELOLWLHVIURPPXOWLSOHSHUVSHFWLYHVZKLFKLQYROYHGWKHGH¿QLWLRQRIFULWLFDOGDWD LQFOXGLQJSHUVRQDOLQIRUPDWLRQDQGFRQ¿GHQWLDOEXVLQHVVLQIRUPDWLRQ DVHFXUHFRQ¿JXUDWLRQDQGVHWXSIRUQHWZRUNV\VWHPVWKDWKDQGOHVXFKFULWLFDOGDWD
physical and logical access control, audit log management and the establishment of a system for emergencies, and the maintenance of a policy
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WKURXJKWKLVSURFHVVDQGFODUL¿HGDUHDVUHTXLULQJUHLQIRUFHPHQWZHDOVRDVVLVWHGZLWKWKHLPSOHPHQWDWLRQRIDGPLQLVWUDWLYHWHFKQLFDOKXPDQ
DQGRUJDQL]DWLRQDOFRXQWHUPHDVXUHVThe distinguishing feature of DIC’s initiatives is the Company’s focus on introducing measures and rules that give due consideration topracticality so as not to be a hindrance to existing business while at the same time ensuring its ability to ensure effective security. I look forward
to continuing to assist DIC in its efforts to strengthen its information security in the years ahead.
General Manager, Advanced Information Security Services Division, BroadBand Security, Inc.

DIC Report 201963

Nobukazu Yamada

Environment, Safety and Health (ESH)

SDGs Goals 3, 6, 7, 12, 13, 14 and 15

Toward the Achievement of a Sustainable SocietyManagement System
The DIC Group promotes a broad range of ESH initiatives through its Responsible Care program.

Basic Philosophy$VDFRPSDQ\WKDWPDQXIDFWXUHVDQGVHOOVFKHPLFDOVXEVWDQFHV',&VHWVVWDQGDUGL]HGVDIHW\UHJXODWLRQVIRU(6+LQLWLDWLYHV7KH&RPSDQ\LVZRUNLQJWRH[FHHGUHJXODWRU\VWDQGDUGVDQG
fully disclose results. Annual measures augment its core policy.

| Initiatives to Date+DYLQJHVWDEOLVKHGLWV3ULQFLSOHDQG3ROLF\IRUWKH(QYLURQPHQW6DIHW\DQG+HDOWKLQLQ',&SOHGJHGWRLPSOHPHQWWKHSUHFHSWVRI5HVSRQVLEOH&DUH6LQFHUHDIILUPLQJLWVVXSSRUWIRU5HVSRQVLEOH&DUHPDQDJHPHQWLQ-DQXDU\E\VLJQLQJWKH&(2¶V'HFODUDWLRQRI6XSSRUWIRUWKH5HVSRQVLEOH&DUH*OREDO&KDUWHUWKH&RPSDQ\KDVSURPRWHGFRQVWDQWLPSURYHPHQWV,Q',&DPHQGHGLWV3ULQFLSOHDQG3ROLF\IRUWKH(QYLURQPHQW6DIHW\DQG+HDOWKDQGUHQDPHGLWWKH3ROLF\
IRUWKH(QYLURQPHQW6DIHW\DQG+HDOWK7KHQDPHZDVVXEVHTXHQWO\UHYLVHGWRWKH(QYLURQPHQW6DIHW\DQG+HDOWK3ROLF\

DIC is a signatory to the International Council of
Chemical Associations’ Responsible Care Global Charter

Environment, Safety and Health Policy$VDUHVSRQVLEOHFRUSRUDWHFLWL]HQDQGDVDFRPSDQ\WKDWPDQXIDFWXUHVDQGVHOOVFKHPLFDOVXEVWDQFHV',&UHFRJQL]HVWKDWFDUHIRUWKHHQYLURQPHQWsafety and health is fundamental to the management of the Company. DIC is committed to the concept of sustainable development in all aspects of its
EXVLQHVVHVDQGFRQWULEXWHVWRWKHJOREDOHQYLURQPHQWLQFOXGLQJELRGLYHUVLW\E\FUHDWLQJHQYLURQPHQWDOO\VRXQGSURGXFWVDQGWHFKQRORJLHV❶ :HWDNHUHVSRQVLELOLW\IRUWKHHQYLURQPHQWDOVDIHW\DQGKHDOWKLPSOLFDWLRQVRISURGXFWVWKURXJKRXWWKHLUOLIHF\FOHV❷ :HFRQWLQXRXVO\VHWJRDOVDQGWDUJHWVIRUHQYLURQPHQWDOVDIHW\DQGKHDOWKLPSURYHPHQWV❸ :HFRPSO\VWULFWO\ZLWKODZVUHJXODWLRQVDQGDJUHHPHQWVUHODWLYHWRWKHHQYLURQPHQWVDIHW\DQGKHDOWK)RUFRXQWULHVODFNLQJVXFKODZVZHSULRULWL]HVDIHRSHUDWLRQVDQGSURWHFWLRQRIWKHHQYLURQPHQW❹ :HV\VWHPDWLFDOO\SURYLGHHGXFDWLRQDQGWUDLQLQJRQWKHHQYLURQPHQWVDIHW\DQGKHDOWK❺ :HSUHSDUHV\VWHPVDQGDXGLWLQWHUQDOO\WREHQH¿WWKHHQYLURQPHQWVDIHW\DQGKHDOWK:HGLVFORVHWKHVHSROLFLHVLQWHUQDOO\DQGH[WHUQDOO\DQGDVNWKDWDOO',&*URXSFRPSDQLHVREVHUYHWKHP7KHDERYHPHQWLRQHG³VDIHW\´also encompasses security and disaster prevention.

| Focus on Product Stewardship
The DIC Group views product stewardship as essential to the promotion of Responsible Care. Product stewardship is a philosophy that emphasizes
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(6+LPSDFWRISURGXFWVRYHUWKHLUHQWLUHOLIHF\FOH²LHIURPWKHGHYHORSPHQWRIFKHPLFDOVXEVWDQFHVWKURXJKWRSURFXUHPHQWSURGXFWLRQWUDQVSRUWVDOHuse and disposal or recycling.

Applying the PDCA Cycle to Seven Responsible Care Codes
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-DSDQ5HVSRQVLEOH&DUH&RXQFLO WKH¿UVWVL[FRGHVOLVWHG DQGDPDQDJHPHQWFRGHWKDWZDVGHYLVHGLQWHUQDOO\,QXQGHUWDNLQJWKHVHLQLWLDWLYHV',&DQG
',&*URXSFRPSDQLHVOHYHUDJHWKH*URXS¶V,62FHUWL¿HGHQYLURQPHQWDOPDQDJHPHQWV\VWHP,QDGGLWLRQWRWKHVHV\VWHPVFHUWDLQRYHUVHDV*URXSFRPSDQLHVDUHZRUNLQJWRVHFXUHWKH,62¶V2FFXSDWLRQDO6DIHW\DQG+HDOWK0DQDJHPHQW6\VWHP 26+06 FHUWL¿FDWLRQWKURXJKRQJRLQJHIIRUWVWRHQKDQFH
their Responsible Care capabilities.
DIC Report 2019

64

ESH

Reviews
conducted
bymanagement❶ (QYLURQPHQWDOSURWHFWLRQ FRQWLQXRXVUHGXFWLRQRIFKHPLFDOHPLVVLRQV❷ 3URFHVVVDIHW\DQGGLVDVWHUSUHYHQWLRQ SUHYHQWLRQRI¿UHVH[SORVLRQVDQGWKHGLVFKDUJHRIFKHPLFDOV❸ 2FFXSDWLRQDOVDIHW\DQGKHDOWK SURWHFWLRQRIWKHVDIHW\DQGKHDOWKRIHPSOR\HHV

Act❹ &KHPLFDODQGSURGXFWVDIHW\ PDQDJHPHQWRIULVNVDVVRFLDWHGZLWKFKHPLFDOV❺ 6DIHW\LQORJLVWLFV UHGXFWLRQRIFKHPLFDOULVNVDVVRFLDWHGZLWKWKHGLVWULEXWLRQRIFKHPLFDOV

CheckResponsible Care
Initiatives
Improve❻ 'LDORJXHZLWKVRFLHW\ FRPPXQLFDWLRQZLWKORFDOFRPPXQLWLHVUHJDUGLQJWKHHQYLURQPHQWVDIHW\DQGKHDOWK❼ 0DQDJHPHQWV\VWHP IRUXQLI\LQJWKHDERYHFRGHVDVDV\VWHP

Do

Plan

Implement/
manageFormulateplans

Annual Activity Plans
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Responsible Care initiatives and contribute to an environment-friendly society through its manufacturing activities.

Fiscal Year 2018 Activity Plans,Q¿VFDO\HDUWKH',&*URXSHQJDJHGLQ5HVSRQVLEOH&DUHLQLWLDWLYHVEDVHGRQWKHIROORZLQJDFWLYLW\SODQVThe DIC Group’s Responsible Care Activity Plans for Fiscal Year 2018
❶ Occupational safety and health/disaster prevention,QOLQHZLWKWKH',&*URXS¶VIXQGDPHQWDOREMHFWLYHZKLFKUHPDLQVWKHDFKLHYHPHQWRIDQDFFLGHQWIUHHZRUNSODFHVHWUHJLRQDOWDUJHWVIRUUHGXFLQJWKHLQFLGHQFHRIRFFXSDWLRQDODFFLGHQWVLQ¿VFDO\HDU
❷ Environmental preservation,QOLQHZLWKWKH',&*URXS¶VJRDORIUHGXFLQJLWVLPSDFWRQWKHHQYLURQPHQWVHWUHJLRQDOWDUJHWVIRUORZHULQJHQYLURQPHQWDOLPSDFWDQGLPSOHPHQWPHDVXUHVWRIDFLOLWDWHWKHDFKLHYHPHQWWKHUHRI2ISDUWLFXODUQRWHSURPRWHHQHUJ\VDYLQJLQLWLDWLYHVDQG
UHGXFH&2HPLVVLRQVLQFOXGLQJWKURXJKWKHXVHRIHQHUJ\IURPUHQHZDEOHVRXUFHVPDLQWDLQLQJDQDZDUHQHVVRIWKHPHGLXPWHUPWDUJHWIRUUHGXFLQJWKH',&*URXS¶VDEVROXWHHPLVVLRQVRI&2E\IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU
DQDQQXDODYHUDJHGHFUHDVHRI
❸ Logistics safety

Promote the provision of information pertinent to the safe transportation of chemical substances.
❹ Product stewardship

3URPRWHWKHSURYLVLRQRILQIRUPDWLRQWRVWDNHKROGHUVUHJDUGLQJWKHDSSURSULDWHKDQGOLQJRISURGXFWVRYHUWKHLUHQWLUHOLIHF\FOHV❺ Communication with society

Report on the results of the DIC Group’s Responsible Care activities via the DIC Report.
❻ Management system

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5HVSRQVLEOH&DUHDFWLYLWLHV)RVWHUKXPDQUHVRXUFHVLQDUHDVSHUWLQHQWWR(6+Message from the CEO',&¶VSUHVLGHQWDQG&(2SUHSDUHVDPHVVDJHIRUHPSOR\HHV
IRU(QYLURQPHQW0RQWKDQG1DWLRQDO6DIHW\:HHN

DIC Report 2019

65

ESH

Framework for Promoting Responsible Care

Framework for Promoting Responsible Care
(DFK\HDUWKH',&*URXSGH¿QHVSULRULW\LVVXHVWRDGGUHVVDQGXVHVWKH3'&$F\FOHLQYROXQWDU\LQLWLDWLYHVDWWKH*URXSFRPSDQ\SODQWand research laboratory levels. The Responsible Care Department
provides support for these initiatives to advance their progress andconducts regular audits to ensure compliance and improve safety andenvironmental performance.

Support for Group Company Responsible Care Initiatives

Production
Management Unit

Technical
Management Unit

Responsible Care Department
Support for ESH audits
Production and R&D facilities
Safety and Environment Group

Individuals in charge of
Responsible Care

Product division
Individuals in charge of
Responsible Care

Technical

The Responsible Care Department provides wide-ranging support to*URXSFRPSDQLHVLQ-DSDQDQGRYHUVHDVUHJDUGOHVVRIVL]H DWRWDORIVLWHV ZLWKWKHJRDORIHQKDQFLQJ5HVSRQVLEOH&DUHLQLWLDWLYHV*URXSZLGH

Production

Product division

Product division
Individuals in charge of
Responsible Care$FTXLVLWLRQRI&HUWL¿FDWLRQ8QGHU,62
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standard for environmental management systems.

| Principal Initiatives in Fiscal Year 2018
Support for Overseas Group Companies,Q¿VFDO\HDUWKH',&*URXSUHEXLOWLWVIUDPHZRUNIRUVXSSRUWLQJWKHHIIRUWVRI*URXSFRPSDQLHVRYHUVHDVWRSURPRWH(6+LQLWLDWLYHVLQDÀH[LEOHDXWRQRPRXVPDQQHUDSSURSULDWHIRUHDFKFRXQWU\DQGWHUULWRU\2QFHDQQXDOO\H[HFXWLYHVIURP*URXSFRPSDQLHVDQGVLWHJHQHUDOPDQDJHUVLQ*UHDWHU&KLQDDQGWKH$VLD±
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1RYHPEHU

Framework for promoting ESH in the Asia–PaciÀc region,QWKH$VLD±3DFL¿FUHJLRQWKH',&*URXSKDVHVWDEOLVKHG(6+FRXQWU\KHDGV LQGLYLGXDOVLQFKDUJHRI5HVSRQVLEOH&DUHLQLQGLYLGXDOFRXQWULHV XQGHUWKHVXSHUYLVLRQRIWKHUHJLRQDO(6+
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GLUHFWRUWRGLVFXVVWKHUHJLRQ¶V(6+SROLFLHVWDUJHWVDQGFKDOOHQJHV,QDGGLWLRQDUHJLRQDOFRXQWU\KHDGFRQIHUHQFHLVKHOGDQQXDOO\LQ6LQJDSRUHZLWKSDUWLFLSDQWVLQFOXGLQJ(6+
FRXQWU\KHDGVIURP,QGRQHVLD7KDLODQGDQG0DOD\VLDWKHUHJLRQDO(6+GLUHFWRUWKHH[HFXWLYH
LQFKDUJHRIUHJLRQDORSHUDWLRQVDQG5HVSRQVLEOH&DUHRI¿FHUVZKRPHHWWRGLVFXVV(6+
SROLFLHVWDUJHWVDQGFKDOOHQJHVIRUWKHVXEVHTXHQW\HDU$WRWDORISHRSOHWRRNSDUWLQWKH
PHHWLQJZKLFKZDVKHOGLQ1RYHPEHUDIC Report 201966

Regional ESH Director for Asia‒Paciﬁc
Regional ESH Manager for Asia‒Paciﬁc

DIC Asia Paciﬁc Pte Ltd

ESH
country head

ESH
country head

ESH
country head

ESH
country head

ESH
country headSouth Asia
India
Sri Lanka
Pakistan

Oceania
Australia
New ZealandThailand

Malaysia

Indonesia

Philippines
VietnamSingapore

ESH【Regional Initiatives】

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and local staff are also held regularly to facilitate the prompt resolution of issues.

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DIC (China) Conducts Fiscal Year 2018 Greater China Safety
Management Improvement Training Program
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Improvement Training Program

Europe, the Americas and Africa
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67

ESH

ESH Auditing
Basic Approach
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each year to enhance Responsible Care performance across the DIC Group.
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effectiveness of Responsible Care initiatives.
(+6DXGLWFRQGXFWHGE\',&¶V&KDLUPDQDQG&(2| Initiatives in Fiscal Year 2018
Third-Party Audits,Q-DSDQ5HVSRQVLEOH&DUH'HSDUWPHQWVSHFLDOLVWVKDYHDXGLWHGWKH5HVSRQVLEOH&DUHHIIRUWVRIGRPHVWLFFRQVROLGDWHGVXEVLGLDULHVVLQFH¿VFDO\HDU
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provided directions regarding the administration thereof.
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Outline of ESH Audits Implemented (Fiscal Year 2018)
Overseas

Japan
DIC

DIC Graphics

9 sitesTotal

4 sites

13 sites

Audits Conducted at Subsidiaries’ Sites(Fiscal Year 2018)

GreaterChina

21

companies

Total

ROK

3

companies

Asia–Pacific region

16

companies(out of 21)

40 companies

Sun Chemical Group

Seiko PMC Group33 sites

7 sites

DIC Report 2019

68

ESH

Occupational Safety and Health/Disaster Prevention
Viewing the prioritization of operational safety as a core management tenet, the DIC Group works tirelessly to prevent accidents and disasters and boost the level of ESH initiatives.

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Goals for fiscal year 2018

Ensure occupational safety and health.

Reduce frequency of occupational
accidents resulting in workdays lost.
DIC Group in Japan:
1.8
Asia–Pacific region:
2.2
Greater China:
2.0
Americas and Europe: 8.0(Global DIC Group:
4.56)

Achievements in fiscal year 2018

Reductions achieved:
DIC Group in Japan:
Asia-Pacific region:
Greater China:
Americas and Europe:(Global DIC Group:

2.86
2.88
1.41
7.53
4.69)

Evaluation

Goals for fiscal year 2019★

Reduce frequency of occupational
accidents resulting in workdays lost.
DIC Group in Japan:
1.8
Asia-Pacific region:
2.2
Greater China:
1.5
Americas and Europe: 8.0(Global DIC Group:
4.44)

Occupational Safety and Health| Operational Safety: Fundamental to Businesses
The DIC Group recognizes that operational safety is both fundamental to its businesses and the core component of Responsible Care. Accordingly, theCompany undertakes occupational safety and health, security and disaster prevention measures to foster a “Safety First” philosophy Groupwide and in themind of every employee.
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With the aim of preventing such accidents, the DIC Group places a high priority on reducing risks in the workplace by enhancing awareness of Principles
of Safe Conduct and training highly perceptive safety personnel. The Group strives to enhance safety through efforts to reinforce its safety infrastructure andcreate a safety-oriented corporate culture.

Workplace safety posters featuring the president and CEO in three languages for use at sites in Japan and overseas| Framework for Promotion
The DIC Group sets individual regional occupational safety and health targets. The Responsible Care Department and regional headquarters work together to
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69

ESH

| Principal Initiatives in Fiscal Year 2018
1

Making Regional Data Visible through Monthly Reports

The DIC Group conducts its diverse businesses in accordance with a wide range of national and regional legal systems, working environments and practices. The risk ofaccidents and disasters varies from one industry to another because of differences in the facilities, machinery and raw materials used. For Group companies to work as one
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Americas and Europe).
DIC promotes the sharing of information on accidents, disasters and reporting procedures for each region, as well as gathered and shared statistical information related tooccupational safety, including employee numbers, working hours, number of accidents leading to workdays lost, number of accidents not leading to workdays lost, number ofaccidents involving fires/explosions, workdays lost, workdays lost before restart of operations, occupational
accident frequency rate, occupational accident severity rate, workdays lost per thousand employees andworkdays lost per million work hours. This approach makes it possible to objectively compare the operationalsafety of individual Group companies, establish more precise targets and facilitate improvement programs.
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workdays lost, occupational accident frequency rates and other monthly data for these regions, thereby further
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and storing this data in the cloud to facilitate centralized management.
2Monthly report

Reducing Risks

By understanding potential risks in production processes, facilities and devices, and the hazards of chemical substances, the DIC Group systematically prepares
initiatives to prevent accidents and occupational injuries. In Japan, the Group has formulated guidelines for conducting risk assessments when deploying new or
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Group formulated proprietary assessment guidelines, including for assessment procedures, and is considering measures to evaluate hazards and toxicity and lower
risks associated with chemicals set forth in Japan’s Poisonous and Deleterious Substances Control Act, such as modifying and improving practices for handling such
substances. Individual sites have created risk assessment frameworks and developed three-year plans to govern initiatives. The progress of these risk assessments is
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DIC Holds Hands-On Demonstration of Powered Exoskeleton Suit
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by employees of the Chiba and Saitama plants. With the goal of promoting work style reform, the Production Management Unit is working to increase opportunities
for female employees on production lines and to provide positive work and production environments, thereby bolstering productivity. As part of this effort, the unit isconsidering the deployment of HAL.
HAL is a cyborg-type robot suit developed by Cyberdyne Inc. to improve, support and enhance the wearer’s musculoskeletal functions. Thanks to its light weightNJ DQGFRPSDFWGHVLJQ+$/UHGXFHVVWUHVVRQWKHZHDUHU¶VOXPEDUUHJLRQE\XSWR$WWKHHYHQWDWRWDORIHPSOR\HHVGRQQHGWKH+$//XPEDU7\SH
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Looking ahead, DIC will analyze work and conduct practical tests at individual sites. Since the model tested is not explosion-proof, consideration of adoption
will initially begin with sites that do not handle hazardous materials. Once an explosion-proof model is developed, adoption will be expanded to include hazardous
materials–related sites.

HAL Lumbar Type for Labor Support

Employees participating in the hands-on demonstration

DIC Report 2019

70

ESH

3

Promoting E-Learning–Based Training for Employees

To enhance its ESH and disaster prevention capabilities, the DIC Group recognizes theimportance of ensuring that all of its employees gain a broad understanding of chemical
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the Group introduced an e-learning program on a trial basis, structuring training aroundlaws and regulations pertinent to the operation of production facilities, including the Fire
Service Act, the Air Pollution Control Law and the High Pressure Gas Safety Act, andverifying the appropriateness of education materials from the perspective of Responsible&DUH'HSDUWPHQWVSHFLDOLVWV(6+RI¿FHUVDQGSURGXFWLRQGHSDUWPHQWVDPRQJRWKHUV,QILVFDO\HDUWKHSURJUDPZDVLQWURGXFHGIRUPDOO\IRU',&*URXSFRPSDQLHVLQ
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employees took part in the program.
Portion of e-learning program

4

Training Skilled Safety Personnel to Predict Risks

To foster skilled safety personnel, the DIC Group provides regular safety education and training on how to handle chemical substances, usingmaterials such as Principles of Safe Conduct, Environment and Safety Guidelines for the R&D Department, safety data sheets (SDSs) and its
Occupational Accident Case Studies database. In recent years, the Group has focused especially on a technique called Kiken Yochi Training(KYT) (“hazard prediction training”) and hands-on safety training for employees of Group companies worldwide. Principles of Safe Conduct
has been translated into several languages, with local employees in the ROK and Malaysia translating the document for their own use after
corporate headquarters produced English- and Chinese-language versions for use as training materials at overseas Group companies.
)LVFDO\HDUEURXJKWSXEOLFDWLRQRIWKH¿IWKHGLWLRQRIPrinciples of Safe ConductZKLFKLVXSGDWHGHYHU\\HDUVDVZHOODVWKHODXQFKof an animated version. The Group also continued to promote use of KYT, a constructive technique to further increase safety awareness,
DPRQJ*URXSFRPSDQLHVLQ-DSDQDVZHOODVWRDFFHOHUDWHGHSOR\PHQWRI.<7LQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ

Web-based animated version of Principles of Safe Conduct

5

Promoting Hands-On Safety Training

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sites), Taiwan, Malaysia and Indonesia. Over the past few years, these and other initiatives have helped to almost halve the occupational
accident frequency rate* resulting in workdays lost at DIC Group sites in Japan. The Group’s hands-on safety training simulates common
SURGXFWLRQÀRRUDFFLGHQWV²LQFOXGLQJWKRVHLQYROYLQJHQWDQJOHPHQWLQURWDWLQJGHYLFHVIDOOVIURPKLJKSODFHVDQGLQFLVHGZRXQGVFDXVHGE\FXWWLQJHTXLSPHQW²EDVHGRQDFWXDOSUHYLRXVH[DPSOHVZLWKWKHDLPRIUHGXFLQJHPSOR\HHV¶ZLOOLQJQHVVWRDFFHSWULVNVDQGIRVWHULQJWKHLU
ability to recognize danger. In doing so, the Group seeks to transform the mindset of employees by encouraging them to think and act on theirown to protect themselves and each other from latent risks.
* The “occupational accident frequency rate” expresses the frequency of accidents resulting in workdays lost, calculated as the number of deaths or injuries per million work hours.

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| Initiatives in Japan,QWKH',&*URXSRSHQHGWKH6DLWDPD+DQGV2Q6DIHW\7UDLQLQJ&HQWHUDIDFLOLW\ERDVWLQJHTXLSPHQWWKDWDOORZVWKHVLPXODWLRQRI
DQDUUD\RIDFFLGHQWVZLWKWKHJRDORIIRVWHULQJVNLOOHGVDIHW\SHUVRQQHOE\LQFRUSRUDWLQJWUDLQLQJLQQHZHPSOR\HHDQGUDQNVSHFL¿FWUDLQLQJ
programs. DIC’s Chiba, Sakai, Hokuriku, Saitama, Kashima and other plants have also established their own hands-on safety training
equipment and curricula to further embed safety into the Group’s culture.
With the aim of reducing accidents among inexperienced employees, Group companies, led by DIC and DIC Graphics, have included
hands-on safety training and KYT in the training curricula
IRU QHZ HPSOR\HHV ,Q ILVFDO \HDU  WKH *URXS
downsized six types of hands-on equipment for use in
the mobile hands-on training initiative. Instructors for thisinitiative are employees at each site. The Responsible
Care Department places a high emphasis on fostering
hands-on training instructors and has established a
KYT for new employees
Hands-on safety training: Simulating being caught in a chucking apparatus
licensing system.

believe it is the important to increase employees’ ability to recognize danger and to think
VOICE Iand
make improvements on their own.
The number of accidents at and resulting damage to DIC facilities continues to trend upward. In many cases, the causes thereof outlined in disaster
EXOOHWLQVDUHXQDFFHSWDEOH)HHOLQJDVWURQJQHHGWRLPSURYHP\DELOLW\WRUHFRJQL]HGDQJHU,SDUWLFLSDWHGLQWKH&ODVVKDQGVRQWUDLQLQJLQVWUXFWRU
licensing program organized by the Responsible Care Department. Hands-on training is also provided at the Hokuriku Plant and I have served as
DQLQVWUXFWRULQWKHSDVWEXWRXUIRFXVZDVDOZD\VRQWKHLPSRUWDQFHRIEDVLFVWKDWLVRINQRZLQJZKDWQRWWRGR,QFRQWUDVWWKH&ODVVKDQGVRQ
training instructor licensing program prioritized our ability to recognize issues and improvements that could be made at our own workplaces. Lecturers
did not try to force their opinions on us, but rather guided us skillfully to think for ourselves, which I found tremendously helpful.
Going forward, I will work to provide guidance in a manner that will help improve the ability of employees to recognize danger, as well as to think andmake improvements on their own. Through such efforts, I hope to help reduce the number of unacceptable accidents.
Assistant Manager, Safety and Environment Group, Hokuriku Plant, DIC Corporation

Yasushi Sunada

Initiatives to Prevent Electrostatic Accidents
Electrostatic accidents such as fires, explosions and electric shocks occur when front-line employees at production facilities become
electrically charged and energy from the accumulated static electricity is discharged, causing solvents, solvent-containing materials or
powders to ignite.
Recent years have brought an increase in the use of easily charged copolymers in a broad range of industries, which has led to an increasein accidents in diverse locations and all seasons. To prevent such disasters, is it important to recognize the dangers of static electricity andtake proper precautions on a regular basis to maintain and/or
improve workplace safety. It was with this in mind that in March',&RUJDQL]HGDOHFWXUHDWWKH7RN\R3ODQWRQWKHWKHPH
RI HOHFWURVWDWLF DFFLGHQWV DQG WKHLU SUHYHQWLRQ$ WRWDO RI HQWKXVLDVWLFHPSOR\HHVDWWHQGHGWKHOHFWXUH,Q¿VFDO\HDU
the Company plans to hold related lectures at the Kashima Plant
and at four sites belonging to DIC Group sites in Indonesia.
Lecture at the Tokyo Plant| Initiatives at Overseas Group Companies
Group companies overseas are also deploying hands-on safety training. In Greater China, hands-on safety training equipment has
been installed at Nantong DIC Color Co., Ltd., a manufacturer of printing inks and organic pigments; DIC Graphics (Guangzhou)Ltd., amanufacturer of printing inks; and Changzhou Huari New Material, which manufactures synthetic resins, in the PRC, and printing inksPDQXIDFWXUHU',&*UDSKLFV&KLD/XQJLQ7DLZDQ,QWKH$VLD±3DFL¿FUHJLRQHTXLSPHQWKDVEHHQLQVWDOOHGDW',&&RPSRXQGV 0DOD\VLD 
Sdn. Bhd. and Indonesia’s PT DIC ASTRA Chemicals, both of which manufacture compounds. These companies provide hands-on safety
WUDLQLQJIRUHPSOR\HHVDFURVVWKHLUUHVSHFWLYHUHJLRQVDVZHOODVHGXFDWLRQIRUVDIHW\LQVWUXFWRUV,Q¿VFDO\HDUWKHFXPXODWLYHQXPEHU
RISDUWLFLSDQWVLQKDQGVRQVDIHW\WUDLQLQJDFURVVWKHJOREDO',&*URXSVXUSDVVHG

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Hands-On Safety Training Facilities Established in Thailand and India,Q$XJXVWKDQGVRQVDIHW\WUDLQLQJHTXLSPHQWIRUVLPXODWLQJHQWDQJOHPHQWLQURWDWLQJGHYLFHVWXPEOHVIDOOVIURPKLJKSODFHVDQGRWKHUFRPPRQ
workplace accidents were installed at Siam Chemical Industry Co.,Ltd.’s plant in Samut Prakan Province and DIC India Ltd.’s plant in Noida. The global
deployment of hands-on safety training equipment, including the installation of equipment, has proceeded under the direction of DIC in Tokyo. These
IDFLOLWLHVDOVRSURYLGHWUDLQLQJWRTXDOLI\(6+RI¿FHUVDVVLJQHGWR*URXSFRPSDQLHVDFURVVWKH$VLD±3DFL¿FUHJLRQDVKDQGVRQVDIHW\LQVWUXFWRUVWRRYHUVHH
training to local employees, which has underpinned a steady increase in awareness of safety. The installation of equipment at Siam Chemical Industry and',&,QGLDIDFLOLWLHVPDUNVWKH¿UVWWLPHORFDO*URXSFRPSDQLHVDQGHPSOR\HHVKDYHVSHDUKHDGHGVXFKDPRYH

Employees participating in hands-on safety training at Siam Chemical Industry (left) and DIC India (center) and view of a training room

Other Initiatives
In the PRC, synthetic resins manufacturer Changzhou Huari New Material is expanding efforts to fostera safety-oriented corporate culture. These include installing safety-related signage across its site andencouraging awareness of occupational safety and health and disaster prevention.

Number of Hands-On Safety Training Participants (Fiscal Year 2018)
DIC Group in Japan
FY2018Cumulative total(FY2012–2018)

363
8,805

DIC Group overseas (Greater China: 4companies; Asia–Pacific region: 4 companies)

1,256
4,394

Large-scale digital safety display in the PRC

Total

1,619
13,199TT PICS
PIC
Expanding Implementation of Measures to Prevent Accidents: Best Practices Award Established
7KH6XVWDLQDELOLW\&RPPLWWHHUHÀHFWVSULRULW\LQLWLDWLYHVGHVLJQHGWRHQVXUHVDIHRSHUDWLRQVLQLWVDQQXDOVXVWDLQDELOLW\DFWLYLW\SODQV,Q¿VFDO\HDU',&HVWDEOLVKHGDEHVWSUDFWLFHVDZDUGWRUHFRJQL]H
creative measures by DIC Group companies in Japan to prevent accidents and began promoting the dissemination of outstanding examples using the Group’s intranet.
The best practices award program begins with the selection of annual themes related to accidents requiring special attention.
Group companies are encouraged to submit measures implemented in their workplaces for consideration by a screening
Themescommittee including plant Safety and Environment Group managers, which votes to select outstanding examples to receive
Measures to prevent falls and measures to prevent
Fiscal year 2018
DZDUGV,Q¿VFDO\HDUWKHWKHPHVFKRVHQZHUH³0HDVXUHVWRSUHYHQWIDOOV´DQG³0HDVXUHVWRSUHYHQWFKHPLFDOEXUQV´chemical burns$WRWDORIPHDVXUHVWRSUHYHQWIDOOVDQGPHDVXUHVWRSUHYHQWFKHPLFDOEXUQVZHUHVXEPLWWHGIURPZKLFKZLQQHUVRIDQ
Measures to prevent the exposure of solvents andFiscal year 2019
measures to prevent the exposure of dust
award for excellence and second and third place awards were chosen for each theme.

Award for excellence (Measures to prevent falls)
Tokyo Plant, DIC Graphics Corporation
General Affairs & Administration Group (Fumihito Shirai)

DIC Report 201973

Award for excellence (Measures to prevent chemical burns)
Chiba Plant, DIC Corporation
7HDP3RO\PHU7HFKQLFDO*URXS 0DVD\XNL1DQMR

ESHStatus of Occupational Accidents
Workdays Lost Due to Occupational Accidents (FY2016–2018)

The DIC Group promotes a variety of initiatives aimed ateliminating occupational accidents.
   ,Q ILVFDO \HDU  WKH QXPEHU RI RFFXSDWLRQDO
accidents resulting in workdays lost across the global',&*URXSZDVXSVOLJKWO\IURP¿VFDO\HDU/RRNLQJ
ahead, the Group will continue working to analyze thecauses of occupational accidents resulting in workdays
ORVWWKDWKDYHRFFXUUHGWRGDWHDQGWRUHÀHFWLWV¿QGLQJV
in concrete improvements with the goal of preventing theoccurrence of such accidents in the future.

DIC

DIC Group (Japan)

DIC Group (Global)

2016

2017

2018

2016

2017

2018

2016

2017

2018

3

2

6

5

3

8

71

70

91

Number of
workdays lost
Frequency
rate

0.541 0.360 1.071 0.548 0.331 0.848 1.893 1.752 2.221

Severity rate

0.012 0.054 0.021 0.026 0.028 0.013

TRIR*

Note: DIC aggregates and reports data on full-time, part-time and contract employees.

--

--

--

2.35 2.16 2.50 3.07 2.65 2.86 3.84 3.98 4.69

recordable injury rate (TRIR): Number of occupational accidents resulting in lost workdays + Number of occupational accidents* Totalnot resulting in lost workdays / Million work hours

Frequency Rate

Severity Rate

1.50

0.15

1.00

0.10

0.50

0.05

0.00

0.00

10

11

12
DIC

13
JCIA

14

15

16

17

Overall manufacturing industry

10

18

(FY)

Number of occupational deaths or injuries
Total work hours

12
DIC

13
JCIA

14

15

16

17

Overall manufacturing industry

18

(FY)

Severity rate: This expresses the number of workdays lost due to occupational accidents per
1,000 work hours.

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

11

Severity rate ＝× 1,000,000

Total number of workdays lost
Total work hours

× 1,000

A severity rate of 0.1 means 100 workdays lost in one year at a site with 500 people.

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

Safe Corporate Climate Cultivation Working Groups
Safe Corporate Climate Cultivation working groups comprise personnel in charge of safety at plants belonging to DIC and subsidiary DIC Graphics. These groups
KDYHEHHQDFWLYHVLQFH¿VFDO\HDU0HPEHUVPHHWUHJXODUO\WRGLVFXVVDQGH[FKDQJHSURSRVDOVUHJDUGLQJVDIHW\SROLFLHVDQGPHDVXUHV)LVFDO\HDU Working groups presented recommendations on safety policies and produced warning stickers to enhance awareness of workplace hazards.
)LVFDO\HDU Working groups prepared safety posters featuring the president and CEO and started reading out key passages from Principles of Safe
Conduct in workplaces with the aim of making the practices therein routine.
)LVFDO\HDU Working groups prepared an illustrated version of Principles of Safe Conduct for reading out in workplaces.
)LVFDO\HDU Working groups edited Principles of Safe Conduct into a tear-off calendar version for distribution at all workplaces. The calendar version wastranslated into English and Chinese.
)LVFDO\HDU Working groups in the PRC began reading out key passages from Principles of Safe Conduct to further strengthen the DIC Group’s culture of safety.
)LVFDO\HDUV± Working groups updated Principles of Safe ConductDQGLQ-DQXDU\SXEOLVKHGWKH¿IWKHGLWLRQRIWKHGRFXPHQW:RUNLQJJURXSVDOVR
launched an animated version in Chinese and English with the aim of bolstering understanding.

Pages from the illustrated version of Principles of Safe Conduct for workplace reading circles (available inJapanese, English and Chinese)

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| Occupational Health
7KH',&*URXSKDQGOHVDEURDGUDQJHRIFKHPLFDOVLQFOXGLQJVSHFL¿HGFKHPLFDOVXEVWDQFHVDQGRUJDQLFVROYHQWV7RVDIHJXDUGWKHKHDOWKRIHPSOR\HHVKDQGOLQJ
these chemicals, the Group regularly conducts health checkups and environmental measurements, and modifies and improves working conditions as needed.
Industrial physicians, health supervisors and other experts inspect workplaces to manage employee health.

Occupational Health and Safety for Employees of Partner Companies and Subcontractors
In Japan, the DIC Group signs outsourcing agreements with partner companies and subcontractors that have offices on its sites and contracts work out to
FRQVWUXFWLRQDQGORJLVWLFV¿UPV$OOVXFK¿UPVDUHREOLJHGWRREVHUYHWKH',&*URXS¶V(QYLURQPHQW6DIHW\DQG+HDOWK3ROLF\DVZHOODVSHUWLQHQWRFFXSDWLRQDOVDIHW\and health-related laws and regulations. The Group has established a DIC Safety Council at each principal domestic site, enabling site safety and health personnel
and partner companies/subcontractors to cooperate in implementing safety patrols, conducting training and drills related to the handling of chemical substances, andstaging safety rallies that feature lectures, presentations on best practices and other awareness-promoting initiatives during National Safety Week (July) and National(QYLURQPHQW0RQWK -XQH DQGRQVLWHVSHFL¿FVDIHW\GD\V| Disaster Prevention
Basic Approach and Organization$Q\¿UHH[SORVLRQRUOHDNRIKD]DUGRXVVXEVWDQFHVIURPDFKHPLFDOVSODQWFRXOGKDYHDWUHPHQGRXVLPSDFWRQORFDOUHVLGHQWVDQGWKHUHVWRIWKHFRPPXQLW\and damage the health of employees, including those of partner companies. In addition to establishing a security management system to prevent such
accidents, the DIC Group operates and maintains its facilities in line with pertinent laws and regulations. The Group regularly conducts emergency drills andhas earthquake and other response measures in place.
',&DOVRXQGHUWDNHVULVNDVVHVVPHQWVWRHQVXUHLWVDELOLW\WRFRQVWUXFWVDIHSURGXFWLRQIDFLOLWLHV,QWKH',&*URXSIRUPXODWHGWKH',&3URFHVV
Risk Management (PRM) Guidelines*, which consist of four assessment techniques and implementation timetables for each. The Group uses these tools
WRFRQGXFWUHJXODUULVNDVVHVVPHQWVDWHDFKRILWVVLWHV7RDLGLQHIIHFWLYH%&3DQHVVHQWLDOFRPSRQHQWRIULVNPDQDJHPHQWLQ¿VFDO\HDUWKH*URXS
LGHQWL¿HGSULRULW\ULVNVDQGLPSOHPHQWHGHPHUJHQF\UHVSRQVHGULOOV* The DIC PRM Guidelines outline timetables and implementation frameworks for assessing the handling of chemical substances, production processes, production formulas, machinery and work practices withthe aim of comprehensively identifying and steadily reducing risks associated with production and R&D processes.

Process Safety Management
DIC calculates process safety accidents at DIC Group sites in Japan in accordance with International Council of Chemical Associations (ICCA)JXLGHOLQHV,Q¿VFDO\HDUWKH*URXSUHSRUWHGSURFHVVVDIHW\DFFLGHQWV7KHSURFHVVVDIHW\DFFLGHQWIUHTXHQF\UDWH²WKHQXPEHURIVXFKDFFLGHQWVSHUZRUNKRXUV²ZDV7KHUHZDVRQHDFFLGHQWLQYROYLQJDQH[SORVLRQDWD',&*URXSFRPSDQ\LQ-DSDQWKDW
resulted in a fatality.

| Facility Safety Assessment
1 Assessment Procedures
DIC Group production facilities have an array of equipment, ranging from units where chemical reactions are conducted to machine presses and otherprocessing equipment. When modifying processes or upgrading/replacing equipment, the Group assesses safety at every stage, from process design and
FRQVWUXFWLRQWKURXJKWRRSHUDWLRQPDLQWHQDQFHDQG¿QDOGLVSRVDOLQOLQHZLWKULVNDVVHVVPHQWJXLGHOLQHVIRUUHDFWLRQSURFHVVHVDQGIDFLOLWLHVWRHQVXUHKLJKHUVDIHW\OHYHOVIRUQHZSURFHVVHVDQGIDFLOLWLHV,Q¿VFDO\HDU',&UHYLVHGULVNDVVHVVPHQWJXLGHOLQHVIRUPDFKLQHU\DQGHTXLSPHQWDQGSUHSDUHG
educational materials to prevent static electricity accidents.
2 Accident and Disaster Analysis and Timely Information
DIC collects and compiles information on internal and external accidents, disasters and problems into its Occupational Accident Case Studies and Accident
Case Studies databases. After identifying the causes of accidents or problems and establishing points to be checked, the Company incorporates database
information into safety education for DIC and DIC Group companies in Japan and overseas.

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Initiatives to Enhance Safety Competency$FRPSDQ\¶VVDIHW\FRPSHWHQF\FDQEHGH¿QHGDVLWVDELOLW\WRPDLQWDLQVDIHW\OHYHOVDWLWVYDULRXVVLWHV$VDPHDQVRIREMHFWLYHO\HYDOXDWLQJDQGHQKDQFLQJLWVVDIHW\FRPSHWHQF\LQ¿VFDO\HDU',&LQWURGXFHGDQDVVHVVPHQWsystem that encompasses questions about safety infrastructure (technical considerations) and the Company’s cultureof safety (operation and management of organizational culture). This system was developed by the Japan Society for
Safety Engineering (JSSE) as a common benchmark for engineers in the chemicals industry and is currently used bycompanies in Japan that are members of the Safety Competency Enhancement Center.
,Q¿VFDO\HDUWKH6DIHW\&RPSHWHQF\(QKDQFHPHQW&HQWHUIRUPXODWHGDV\VWHPIRUHYDOXDWLQJSURFHVVLQJVLWHVDQGDSULRULWL]HGYHUVLRQRIWKHV\VWHPWRVWUHDPOLQHHYDOXDWLRQV,Q¿VFDO\HDUWKHFHQWHUUHYLHZHGDQG
revamped criteria for assessing safety infrastructure and culture of safety, as a result of which application of thesystem has expanded to include non-chemicals industry companies. Safety Competency Enhancement Center
LQVSHFWLRQVZHUHFRQGXFWHGDWWKH<RNNDLFKLDQG6DLWDPDSODQWVLQ¿VFDO\HDUDQGDWWKH.RPDNLDQG6DNDL3ODQWVLQ¿VFDO\HDU,QVSHFWLRQUHVXOWVRIZKLFKWKH&RPSDQ\LVXVLQJWRLPSOHPHQWIXUWKHULPSURYHPHQWV
3

Sakai Plant

Komaki Plant

accept objective facility safety assessment Àndings with an open mind and use them
VOICE Weto create virtuous cycle of improvement in safety.
Our facility safety assessment system uses third-party assessment organizations with the objective of gaining an objective grasp of safety levels at DIC sites and taking proactive
VWHSVWRFUHDWHDYLUWXRXVF\FOHRILPSURYHPHQW:LWKWKHDLPRIDFKLHYLQJWKH¿UVWSULRULW\RIWKH6DNDL3ODQW¶VVXVWDLQDELOLW\SROLF\ZKLFKLVWRHQVXUHVDIHRSHUDWLRQVDQGLPSURYH
occupational safety, we recognize that it is crucial that we secure the safety of our own site by taking steps to overcome existing weaknesses and front-line capabilities.
3HUWLQHQWGHSDUWPHQWVDWWKH6DNDL3ODQWZRUNZLWKWKH5HVSRQVLEOH&DUH'HSDUWPHQWWRFDUHIXOO\H[DPLQHVWUHQJWKVDQGZHDNQHVVHVLGHQWL¿HGWKURXJKDVVHVVPHQWVDQGWKH
results of guidance received. This process makes it possible to discern challenges to be tackled by the Sakai Plant, as well as to determine the direction of remedial measuresfor challenges that should be addressed not only by a single facility but also on a Companywide basis, and to translate such measures into action in appropriate departments.
General Manager, Sakai Plant, DIC Corporation

Tadashi Inoue| Emergency Response Drills
In addition to daily security patrols and periodic equipment checks, the DIC Group conducts regular emergency response drills based on hypothetical scenarios,
particularly at production sites in Japan and overseas.

Comprehensive disaster drill at the Sakai Plant

T

Comprehensive disaster drill at the Kansai Plant

Comprehensive disaster drill at the Chiba Plant,a designated special disaster protection area

PIC

DIC Graphics’ Utsunomiya Plant Earns First-Ever Win in Tochigi City Ohira Sports Park Hazardous Materials Safety
and FireÀghting Technology Competition
7KHWK7RFKLJL&LW\2KLUD6SRUWV3DUN+D]DUGRXV0DWHULDOV6DIHW\DQG)LUH¿JKWLQJ7HFKQRORJ\&RPSHWLWLRQZDVKHOGLQ
1RYHPEHU7KLVHYHQWLVKHOGHYHU\WZR\HDUVZLWKWKHDLPRISURPRWLQJLPSURYHPHQWVLQWKHWHFKQRORJLHVXVHGLQ
disaster prevention and to gauge the results of everyday disaster drills.
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8WVXQRPL\D3ODQWDFKLHYHGWKHLU¿UVWHYHUYLFWRU\¿QLVKLQJZLWKSRLQWVDIC Report 201976

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ESH

Environmental Conservation
The DIC Group recognizes that it has a responsibility to help address environmental issues and is taking decisive steps to reduce its negative impact, thereby contributing to sustainability.

Climate Change
Basic Philosophy
7KH',&*URXSZRUNVWRUHGXFH&22 emissions over the entire life cycle of its products and, through its business activities, to lower
risks associated with climate change.

| Initiatives Aimed at Preventing Global Warming
Climate change, a principal cause of which is global warming, is an increasingly pressing issue for the entire world. The Intergovernmental Panel on Climate&KDQJH ,3&& WKHOHDGLQJVFLHQWL¿FERG\GHGLFDWHGWRWKHDVVHVVPHQWRIFOLPDWHFKDQJHFRQWLQXHVWRSDLQWDGLUHSLFWXUHIRUWKHIXWXUHRIWKHSODQHWDVD
result of climate change. At the 2015 United Nations Climate Change Conference (the 21st annual session of the Conference of the Parties (COP 21) to theUnited Nations Framework Convention on Climate Change (UNFCCC), participants adopted the Paris Agreement, a move aimed at accelerating efforts totackle this urgent challenge.
$VDPDQXIDFWXUHURI¿QHFKHPLFDOV',&UHFRJQL]HVWKDWSURPRWLQJHIIRUWVWRFXUEJOREDOZDUPLQJLVDFUXFLDOPDQDJHPHQWUHVSRQVLELOLW\7KH&RPSDQ\¶VPHGLXPWHUPVXVWDLQDELOLW\SROLFLHVWKXVLQFOXGHDSOHGJHWRUHGXFHJUHHQKRXVHJDVHPLVVLRQVIURPLWVSURGXFWLRQIDFLOLWLHV7RWKLVHQG',&FRQWLQXHVWDNLQJVWHSVWRUHGXFHHQHUJ\FRQVXPSWLRQDQGSURPRWHGHFDUERQL]DWLRQDVZHOODVWRDFWLYHO\GLVFORVHWKHUHVXOWVRILQLWLDWLYHVDQGREWDLQWKLUGSDUW\
YHUL¿FDWLRQRILWV&22HPLVVLRQVGDWDDVRXWOLQHGEHORZ,QDGGLWLRQRIWKH',&*URXS¶VVLWHV DQGRI¿FHVDQGUHVHDUFKIDFLOLWLHV LQ-DSDQKDYH
EHHQDFFRUGHG'HVLJQDWHG(QHUJ\0DQDJHPHQW)DFWRU\VWDWXV
❶ Undertake energy-saving initiatives worldwide❷ 'HSOR\HIIHFWLYHVWUDWHJLHVWKURXJKZRUNLQJJURXSDFWLYLWLHV❸ Operate energy-saving cogeneration systems (combined heat and electric power generating facilities)❹ (PSOR\HQHUJ\IURPUHQHZDEOHVRXUFHV ELRPDVVERLOHUVZLQGSRZHUDQGVRODUSRZHU DWVXLWDEOHVLWHV❺ ([WHQGHQHUJ\VDYLQJLQLWLDWLYHVWR',&*URXSFRPSDQLHVRYHUVHDV

Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ = Still needs work
Objective of initiatives

Goals for fiscal year 2018

DIC Group
1. Reduce CO2 emissions by 7.0%
from the fiscal year 2013 levelby fiscal year 2020 (averageannual decrease of 1.0%).

Reduce emissions of
CO2 at sites (Scope 1 and 2).
DIC Group (Japan)
1. Reduce CO2 emissions by 7.0%
from the fiscal year 2013 levelby fiscal year 2020 (averageannual decrease of 1.0%).
2. Reduce energy consumption perunit of production 7.0% from thefiscal year 2013 level by fiscal year
2020 (average annual decrease of
1.0%). (Comply with Japan’s Act
on the Rational Use of Energy.)

Achievements in fiscal year 2018

1. CO2 emissions: 617,964 metric tonnes• Down 2.6% from fiscal year 2017 (634,741 metric tonnes)• Down 14.5% from fiscal year 2013 (722,955 metric tonnes)
Reference:
CO2 emissions per unit of production: 289.3 kg/metric tonne• Down 2.3% from fiscal year 2017 (296.1 kg/metric tonne)• Down 11.5% from fiscal year 2013 (327.0 kg/metric tonne)

1. CO2 emissions: 231,820 metric tonnes• Down 5.1% from fiscal year 2017 (244,395metric tonnes)• Down 5.1% from fiscal year 2013 (244,377metric tonnes)
2. Energy consumption per unit of production
3.094 GJ/metric tonne• Down 0.3% from fiscal year 2017 (3.915 GJ/metric tonne)• Down 6.4% from fiscal year 2013 (4.170 GJ/metric tonne)
Reference:
CO2 emissions per unit of production: 212.7 kg/metric tonne• Down 4.1% from fiscal year 2017 (221.8 kg/metric tonne)• Down 8.2% from fiscal year 2013 (212.7 kg/metric tonne)

DIC Report 201977

Evaluation

Goals for fiscal year 2019

★★★

★★★

Reduce CO2 emissions by 30.0%
from the fiscal year 2013 level by
fiscal year 2030 (average annual
decrease of 2.1%).

★★★

★★★

★★★

In line with the global target, reduce CO2
emissions at sites (Scope 1 and 2) by
30.0% from the fiscal year 2013 level by
fiscal year 2030 (average annual
decrease of 2.1%).

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SURJUHVVRILQLWLDWLYHVHQJDJLQJLQGLVFXVVLRQVDQGFRQGXFWLQJSDWUROV',&KDVDOVRVHWXS(QHUJ\6DYLQJZRUNLQJJURXSVFRPSULVLQJPHPEHUVFKRVHQ
IURPHDFKSURGXFWLRQIDFLOLW\WKDWIRVWHUWKHH[FKDQJHRILQIRUPDWLRQUHVHDUFKSHUWDLQLQJWRQHZLWHPVDQGWKH*URXSZLGHLPSOHPHQWDWLRQRIHIIHFWLYH
PHDVXUHV7KLVFRPELQDWLRQRIVLWHDQG*URXSOHYHOLQLWLDWLYHVIRUPVWKHIUDPHZRUNXQGHUZKLFKWKH',&*URXSHQGHDYRUVWRUHGXFHLWV&22 emissions.
2YHUVHDV',&*URXSFRPSDQLHVSURPRWHDZLGHUDQJHRILQGHSHQGHQWHQHUJ\VDYLQJLQLWLDWLYHVWKDWDOLJQZLWKWKH*URXS¶VSROLF\7KH3URGXFWLRQ0DQDJHPHQW'HSDUWPHQWSURYLGHVVXSSRUWRQPXOWLSOHIURQWVLQFOXGLQJWKHGHSOR\PHQWRIPDQDJHPHQWV\VWHPVDQGWKHWUDLQLQJRIHPSOR\HHV&ULWLFDOLQLWLDWLYHVDUHGHEDWHGE\DQGWKHSURJUHVVWKHUHRILVUHSRUWHGRQE\WKH6XVWDLQDELOLW\&RPPLWWHHZKLFKDQVZHUVGLUHFWO\WRWKHSUHVLGHQWDQG&(2| Principal Initiatives in Fiscal Year 2018
1

Setting a New Long-Term Target for the Reduction of CO2 Emissions

7KH',&*URXSKDVGHFODUHG³GHFDUERQL]DWLRQ´DVDNH\WKHPHRILWVVXVWDLQDELOLW\SURJUDPDQGLVZRUNLQJWRORZHUHPLVVLRQVRI&22 by reducing energy
consumed by its businesses, as well as by advancing the use of energy from renewable sources by, among others, adopting biomass fuel, introducing solar
and wind power, and purchasing low-carbon electric power. In October 2016, the Sustainability Committee set a medium-term target for reducing absoluteemissions of CO2DFURVVJOREDO',&*URXSVLWHVE\IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU7RWKLVHQGWKH*URXSDGGHGSURPRWLQJWKHXVH
of electric power generated from renewable energy, including by biomass boilers and solar power systems, as well as by the purchase of low-carbon electric
power, to core energy-saving initiatives at sites.
,QOLQHZLWKLWVFRPPLWPHQWWR(6*PDQDJHPHQWLQ)HEUXDU\WKH*URXSVHWDQHZORQJWHUPWDUJHWLQLWVQHZPHGLXPWHUPPDQDJHPHQWSODQ',&²ZKLFKZLOOJXLGHLWVHIIRUWVIURP¿VFDO\HDUWKURXJK¿VFDO\HDU²RIDUHGXFWLRQLQ&22HPLVVLRQVIURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU%\DFKLHYLQJWKLVWDUJHWZKLFKH[FHHGVWKHUHGXFWLRQSOHGJHGE\-DSDQXQGHUWKH3DULV$JUHHPHQW',&DLPVWRVKRZLWVVWURQJ
FRPPLWPHQWWREHLQJDVRFLDOO\UHVSRQVLEOHPDQXIDFWXUHURI¿QHFKHPLFDOV/RRNLQJDKHDGWKH',&*URXSZLOOZRUNWRDFKLHYHWKHVHWDUJHWVE\SURPRWLQJD
two-pronged strategy centered on promoting energy-saving initiatives at sites and actively advancing the use of renewable energy.

Target: Reduce CO2 emissions 30% from the fiscal year 2013 level by fiscal year 2030

Environment● Install solar power systems and reduce energy consumption per unit of production.
● Introduce a proprietary sustainability index based on reduction of environmental■ Reduce CO2 emissions attributable to production

impact and contribution to market● Utilize recycled materials and adopt biomass-derived materials.

■ Supply products and solutions that contribute to sustainability

Global CO2 Emissions: Forecast
for Fiscal Year 2030 and Contributing Factors

Factoring in
production expansion:-43%(Metric tonnes)
1,000,000

800,000(Target: 30% Reduction from the Fiscal Year 2013 Level)
Emissions(Metric tonnes)

253,000

900,000

Global CO2 Emissions: Results, Forecasts andTarget for Fiscal Year 2030
Production volume(Metric tonnes)

800,000

723,000 88,000

3,000,000

95,000700,000

75,000 20,000 15,000

600,000

15,000500,000

700,000
52,000400,000

2,500,000

506,000
110,000

600,000

300,000

2,000,000

500,000

200,000
100,000

400,000

Fiscal year 2030

Improvement in electric power companies’
CO2 emissions factors

Purchase of green energy certificates

Change in energy mix

Energy-saving measures targeting existing facilities(improvement of performance)

Increase in fuel conversion(shift from coal to palm kernels)

Investment in environmental value(promotion of renewable energy)

Impact of annual energy-saving initiatives

Increase due to expansion of operations
from fiscal year 2018 forward

Decrease in CO2 emissions
reductions as of fiscal year 2017

Fiscal year 201301,500,000

300,000
1,000,000
200,000
500,000

100,000
00

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Production
volumeDIC Report 201978

CO2 emissions

Reduction of CO2
emissions (target)

ESH

2

Energy Consumption and CO2 Emissions by the Global DIC Group$OWKRXJKSURGXFWLRQYROXPHE\WKHJOREDO',&*URXSZDVHVVHQWLDOO\OHYHOLQ¿VFDO\HDUHQHUJ\FRQVXPSWLRQZDVGRZQIURP¿VFDO\HDU
DQGIURPWKH¿VFDO\HDUEDVH\HDU7KH*URXS¶VJOREDO&22HPLVVLRQVGHFOLQHGIURP¿VFDO\HDURUIURP¿VFDO\HDUZKLOHHPLVVLRQVSHUXQLWRISURGXFWLRQH[SUHVVHGLQWHUPVRINLORJUDPVRI&22SHUPHWULFWRQQHZHUHGRZQRUIURP¿VFDO\HDU
7KH',&*URXS¶VGLYHUVHSURGXFWSRUWIROLRHQFRPSDVVHVSULQWLQJLQNVSRO\PHUVSLJPHQWV/&VHQJLQHHULQJSODVWLFVDQGFRPSRXQGV5HFHQW\HDUVKDYH
VHHQDQXSWUHQGLQWKHRXWSXWRIHQHUJ\LQWHQVLYH¿QHFKHPLFDOVDQGDGRZQWUHQGLQWKHRXWSXWRILWHPVWKHSURGXFWLRQRIZKLFKLVFRPSDUDWLYHO\HQHUJ\HI¿FLHQW$JDLQVWWKLVEDFNGURSWKH*URXS¶VVXFFHVVLQDFKLHYLQJDUHGXFWLRQLQWKHYROXPHRI&22HPLWWHGZRUOGZLGHWKDWH[FHHGHGLWVWDUJHWIRUWKH\HDUZDVGXHLQODUJHSDUWWRWKHGHFLVLYHLPSOHPHQWDWLRQRIHQHUJ\VDYLQJDQGFDUERQUHGXFWLRQLQLWLDWLYHVZRUOGZLGHZLWKHIIRUWVE\*URXSFRPSDQLHVLQ-DSDQSOD\LQJDSDUWLFXODUO\VLJQL¿FDQWUROH3ULQFLSDOIDFWRUVEHKLQGWKHVHUHVXOWVLQFOXGHWKHVWDUWXSRIDPHJDVRODUSRZHUV\VWHPZLWKDJHQHUDWLQJFDSDFLW\RI0:DWWKH.DVKLPD3ODQWDQGDELRPDVVERLOHUZLWKDQHYDSRUDWLRQUDWHRIPHWULFWRQQHVKRXUDWWKH+RNXULNX3ODQWDQGWKHSXUFKDVHRIORZ
FDUERQHOHFWULFSRZHUDWVHYHUDOVLWHVLQ-DSDQ*RLQJIRUZDUGWKH',&*URXSZLOOFRQWLQXHWRWDNHVWHSVWRUHGXFHHQHUJ\FRQVXPSWLRQDVZHOODVWRIXUWKHU
advance its use of renewable energy by shifting to clean fuels and solar power.

-12.7%
from fiscal

Global Energy Consumption
2013

TJ (Terajoules)

2014

2015

2016

2017

2018 (FY)Global Energy Consumption per Unit of Production

year 2013(Metric tonnes of CO2)

14,000600.0

12,000500.0

10,000

2013

2014

2015

-11.5%
from fiscal
year 20132018 (FY)

2016

2017

Other

DIC Group
Globaloverseas DIC Group

400.0

8,000

300.0

6,000

200.0

4,000

100.0

2,000
0
Japan

Sun
ChemicalGreater Asia–PacificChinaregion0

DIC Group Global
overseas DIC Group

Other

Japan

Greater Asia–PacificChinaregion-14.5%
from fiscal

Global CO2 Emissions(Metric tonnes)

Sun
Chemical

2013

2014

2015

2016

2018 (FY)2017year 2013

800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Japan

Sun
ChemicalGreater Asia–PacificChinaregionDIC Group Global
overseas DIC GroupOther

CO2 Emissions by Region
Production volume
Change fromprevious fiscal year

Energyconsumption

Change from fiscal Change fromyear 2013 base year previous fiscal year

Energy consumption
per unit of production

CO2 emissions

Change from fiscal
year 2013 base year

Change fromprevious fiscal year

Change from fiscal
year 2013 base year

Change fromprevious fiscal year

96.8%

99.7%

93.6%

94.9%

DIC Group in Japan

98.9%

98.3%

98.6%

Sun Chemical Group

103.0%

103.4%

100.9%

78.0%

97.9%

75.5%

DIC Group (Greater China)

106.2%

107.6%

93.4%

112.2%

87.9%

104.2%DIC Group (Asia–Pacific region)

90.9%

105.3%

97.4%

111.8%

107.2%

CO2 emissions perunit of production

Change from fiscal Change fromyear 2013 base year previous fiscal year

Change from fiscal
year 2013 base year

94.9%

95.9%

91.8%

101.4%

76.9%

98.4%

74.4%

93.1%

107.8%

87.6%

100.2%

106.2%

97.9%

103.5%

107.8%

98.3%

DIC Group (Other)

95.6%

0.3%

97.7%

7.4%

ー

ー

98.1%

7.0%

ー

ー

DIC Group overseas

100.4%

90.5%

98.6%

82.2%

98.2%

90.8%

98.9%

80.7%

98.5%

89.1%

Global DIC Group

99.6%

94.0%

98.6%

87.3%

99.0%

90.4%

97.4%

85.5%

97.7%

88.5%

Change (Global)

-0.4%

-6.0%

-1.4%

-12.7%

-1.0%

-9.6%

-2.6%

-14.5%-2.3%-11.5%

KPI assessment

ー

ー

ー

ー

○

○

○

○

○

○

DIC Report 2019

79

ESH

DIC Group in Japan

Asia–Pacific region: Decline in production volume
Asia–Pacific region: Impact of energy-saving initiatives and increased productivity
Asia–Pacific region: Change in reporting boundary (shift of DIC Fine Chemicals Private Limited in India to Sun Chemical jurisdiction)
Asia–Pacific region: Increase in output of energy-intensive products (pigments)
Asia–Pacific region: Other factors
Greater China: Flagging operating rates at facilities producing energy-intensive products (pigments)
Greater China: Impact of energy-saving initiatives and increased productivity
Greater China: Other factors
Greater China: Increase in production volume
Greater China: Change in reporting boundary (inclusion of Guangzhou Lidye Resin Co., Ltd.)Sun Chemical Group: Impact of energy-saving initiatives and increased productivity
Sun Chemical Group: Other factors
Sun Chemical Group: Increase in production volume
Sun Chemical Group: Change in reporting boundary (shift of DIC Fine Chemicals Private in India from Asia–Pacific region jurisdiction)
Other: Decrease in production volume at U.S. subsidiary Earthrise Nutritionals, LLC-5,057-6,508-3,651-2,871-1,676
4,155
3,117-1,665-4,384-5,107
6,799
1,946-5,402-2,695-2,013
4,933
620-5,032-3,363
6,109
5,107
-56

Reduction in Global CO2 Emissions Attributable to
the Use of Renewable Energy-2,41150,0008%45,000

7%

2,821

-56

12,716
11,78830,00025,00010,89010,00021,971

28,5185%
4%

10,35924,063

6%

11,007

13,211

20,00015,00027,29633,2863%
2%

17,117

1%

5,000
0

-16,694
2.6%
634,741
618,047

Solar power and others

Wind power

2,091

2,690

metric tonnes of co2

metric tonnes of co2

35,000

0%
2013

2014

Heat generated using
renewable energy

2015

2016

Electric power generatedusing renewable energy

2017

0.7 %

-4,557

Breakdown of Reduction in CO2 Emissions Attributable to
the Use of Renewable Energy (Global) in Fiscal Year 2018
(Reduction (%))

40,0001.9 %-12,491

Change in CO2 emissions (metric tonnes)
Change in CO2 emissions (%)
CO2 emissions in fiscal year 2017
CO2 emissions in fiscal year 2018

(Metric tonnes)

Decrease (%)

Change in CO2 emissions (Metric tonnes)

DIC Group overseas

Factors contributing to change in CO2 emissions
Japan: Purchase of low-carbon electric power (including from existing electric power companies with improved CO 2 emissions factors)
Japan: Implementation of 535 energy-saving initiatives at sites
Japan: Increase in power generated using renewable energy (Kashima and Hokuriku plants)
Japan: Decrease in incineration of waste oil and waste plastic (Chiba Plant)
Japan: Decrease in production volume
Japan: Changes in product mix
Other factors

2018 (FY)

Impact of use of renewable energy(Contribution to reduction in CO2 emissions (%))

DIC Report 2019

80

6%
Electric power
generatedusing biomass

7,936

metric tonnes of co2

17%

5%

Decrease in CO2 Emissions
Attributable to the Use ofRenewable Energy (Global)

46,003t-co2
72%

Heat generatedusing biomass

33,286

metric tonnes of co2

1RWHV
1. Steam generated using biomass is calculated as fuel oil equivalent.
2. The portion of the decrease in CO 2 emissions accounted for by the use of electric power
generated using renewable energy is calculated as 0.5 metric tonnes of CO 2 N:K

ESH

3

Energy Consumption and CO2 Emissions by the DIC Group in Japan:LWKSURGXFWLRQYROXPHE\WKH',&*URXSLQ-DSDQ²WKHVLWHVRSHUDWHGE\',&DQGGRPHVWLF*URXSFRPSDQLHV²GRZQLQ¿VFDO\HDUHQHUJ\FRQVXPSWLRQGHFOLQHGDQGHQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQHGJHGGRZQ&22HPLVVLRQVIHOOWRPHWULFWRQQHVIURPPHWULFWRQQHVLQ¿VFDO
year 2017, and CO2HPLVVLRQVSHUXQLWRISURGXFWLRQGHFUHDVHGWRNJ&22PHWULFWRQQHIURPNJ&22PHWULFWRQQH7KHVKDUSGHFOLQHLQ&22 emissionsUHÀHFWHGDPRQJRWKHUVWKHUHYLVLRQRIVWDQGDUGVXVHGWRHYDOXDWHSRWHQWLDOHQYLURQPHQWDOIDFLOLW\LQYHVWPHQWVWRLQFOXGHIDFWRUVVXFKDVEDODQFHEHWZHHQHQYLURQPHQWDO
value and depreciation, making it easier to install solar power systems, among others, and the implementation of energy-saving initiatives at individual sites.
Principal factors behind these results and the resulting reductions included the start-up of a megasolar power system, an increase in know-how regarding theoperational management of wind power systems, an increase in biomass boiler operating rates attributable to a shift to independent maintenance and management, and
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with a low CO2HPLVVLRQVIDFWRUZKLFKDFFRXQWHGIRUDGHFUHDVHRIPHWULFWRQQHV7KHVHIDFWRUVZHUHVXI¿FLHQWWRRIIVHWDQLQFUHDVHDULVLQJIURPFKDQJHVLQSURGXFWPL[\LHOGLQJDQHWUHGXFWLRQLQ&22HPLVVLRQVRIDSSUR[LPDWHO\PHWULFWRQQHVHTXLYDOHQWWRRIWRWDOHPLVVLRQVE\WKH',&*URXSLQ-DSDQ5HJDUGLQJ&22HPLVVLRQVDFURVVLWVVXSSO\FKDLQLQ¿VFDO\HDU',&SDUWLFLSDWHGLQDOHFWXUHRQVFLHQFHEDVHGWDUJHWV 6%7V RUJDQL]HGE\-DSDQ¶V0LQLVWU\RIWKH
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6FRSHHPLVVLRQVDUHLQGLUHFWHPLVVLRQVIURPSURGXFWLRQWUDQVSRUWVKLSPHQWFRPPXWLQJDQGRWKHUDFWLYLWLHVLQWKHVXSSO\FKDLQ

CO2 Emissions by the DIC Group (Including Scope 3)
7.4 %
0.1%
0.2%
0.7%
3.1%
3.4%
2.4%

39.9%
10%
CO2 Emissions
by theDIC Group(Including Scope 3)

33%(Total 3,710,679 metric tonnes)

Purchased goods and services
End-of-life treatment of sold goods
Upstream transportation and distribution
Waste generated in operations
Capital goods
Fuel- and energy-related activities(not included in Scope 1 or Scope 2)
Employee commuting
Business travel
Scope 1
Scope 2

Changes in Energy Consumption and CO2 Emissions
Since Fiscal Year 2013 (DIC Group in Japan)
2013

2014

2015

2016

2017

2018

110

105

103

100

97

95

93.7

90

94.9

85
Production volume

4

Energy consumption

Energy-Saving Initiatives by the DIC Group in Japan

Energy consumption
per unit of production

CO2 emissions',&*URXSVLWHV SODQWVDQG5 'IDFLOLWLHV LQ-DSDQHQGHDYRUWRFRQVHUYHHQHUJ\E\SURPRWLQJWKHIROORZLQJLQLWLDWLYHVZKLFKWDUJHWWKHUHGXFWLRQRIEDVHORDGHQHUJ\FRQVXPSWLRQDQGE\DSSO\LQJWKH3'&$F\FOHWRLPSURYHWKHHI¿FLHQF\RISURGXFWLRQPHWKRGV²WKHUHE\UHGXFLQJHQHUJ\XVHG²DQGVKRUWHQSURFHVVWLPHV
6LQFH¿VFDO\HDUVLWHVDOVRSURPRWHFDUERQUHGXFWLRQLQLWLDWLYHV
(PSOR\HGKLJKO\HI¿FLHQWOLJKWLQJDQGDLUFRQGLWLRQLQJPHDVXUHVWRHOLPLQDWHZDVWH• Introduced energy-saving controls on pumps and blowers
8VHGPRUHHI¿FLHQWFRPSUHVVRUVDQGLPSOHPHQWHGPHDVXUHVWRUHGXFHSUHVVXUHORVVHV• Implemented measures to improve the power factors of electric equipment
$GRSWHGKLJKFRHI¿FLHQWRISHUIRUPDQFHFKLOOHUVDQGSURPRWHGPHDVXUHVWRSUHYHQWFROGDQGKRWZDWHUVXSSO\ZDVWH
5HGXFHGXVHRIERLOHUIXHODPRQJRWKHUVWKURXJKWKHUHFRYHU\RIZDVWHKHDW
(QVXUHGRSWLPDOZDUPLQJWLPHVDQGWHPSHUDWXUHVIRUUDZPDWHULDOV,PSOHPHQWHGHQHUJ\VDYLQJLQLWLDWLYHVDWGRPHVWLFSURGXFWLRQVLWHV• $FWLYHO\SURPRWHGWKHXVHRIUHQHZDEOHHQHUJ\DWVXLWDEOHVLWHV LQVWDOODWLRQRIPHJDVRODUSRZHUV\VWHPDWWKH.DVKLPD3ODQWDQGELRPDVVERLOHUDWWKH+RNXULNX3ODQW• Purchased low-carbon power at suitable sites
,QFUHDVHGRXWSXWRIHOHFWULFSRZHUJHQHUDWHGXVLQJUHQHZDEOHHQHUJ\ ELRPDVVERLOHUDQGZLQGSRZHUJHQHUDWLQJIDFLOLWLHVDWWKH.DVKLPD3ODQW,Q¿VFDO\HDUWKHVHLQLWLDWLYHVUHGXFHGHQHUJ\FRQVXPSWLRQE\DSSUR[LPDWHO\*- HTXLYDOHQWWRDSSUR[LPDWHO\NORIFUXGHRLO 7KLVFRUUHVSRQGVWRDSSUR[LPDWHO\OLWHUGUXPVRIFUXGHRLORURIWKHWRWDOHQHUJ\FRQVXPHGE\WKH',&*URXSLQ-DSDQLQWKHSHULRGXQGHUUHYLHZ*RLQJIRUZDUGWKH',&*URXSZLOOFRQWLQXHZRUNLQJWRUHGXFHLWVFRQVXPSWLRQRIHQHUJ\DVZHOODVWRLGHQWLI\QHZWKHPHVDQGVKDUHEHVWSUDFWLFHVDFURVV*URXSVLWHV,QDGGLWLRQWKH*URXSZLOOUHLQIRUFHRSHUDWLQJPDQXDOVWRRSWLPL]HWKHSHUIRUPDQFH
of key energy-consuming equipment, including boilers, chillers and compressors, andH[SDQGWKHGHSOR\PHQWRILQLWLDWLYHVDWVLWHVERWKLQ-DSDQDQGRYHUVHDV

544 energy-saving initiatives accounted for a reduction inenergy consumption equivalent to approx. 35,000 200-liter
drums of crude oil

544 initiatives

Equivalent to5HGXFWLRQLQ
energyconsumption

approx.

DIC Report 201981

35,000200-liter drums of crude oil

ESH

Key DIC Group Energy-Saving Initiatives in Japan in Fiscal Year 2018
No

Production
floor
Production
Production
facility
process

1

Chiba

2

Chiba

3

Chiba

4

Hokuriku

5

Yokkaichi

6

Yokkaichi

7

Kashima8

Kashima9

Kashima10

Kashima11

Kashima

Impact in fiscal year 2018
Reduction in annual Reduction in CO2 Financial impact of reduction
Category energy
emissionsin annual energy consumption
consumption

Energy-saving initiative(Metric tonnes)(Thousands of yen)

1,677

801

2,555

1,778

852

2,708

477

227

727

Heat

31,517

1,561

22,739

Heat

9,619

476

9,910

(GJ)

Electric
powerElectric
powerElectric
power

Installation of biomass boiler

Production
team

Cleaned rust buildup from the surface of F-series heating
medium boiler to improve combustion efficiency

Production
team
Utility control
group
Utility control
group
Utility control
group

Installed systems for improving power factors in F-series substations

DIC EP(J-4)
DIC EP(J-3)

D productionfloor
J productionfloor
J production
floor
Utility control
group

Suspended operation of CU-1 refrigerator after transfer of products
Replaced heating medium pump (reduced motor capacity)
Reduced number of P-34 water pumps from two to one

3,671

186

4,976

18,647908

17,446

Increased operation of wind power facility by enhancing operating stability

Electric
powerElectric
powerElectric
power

7,295

355

10,464

Increased volume of heat used by enhancing operation of biomass boiler

Heat

16,624828

14,408

Improved air ratio of heating medium boiler from 1.22 to 1.15

Heat

4,920

245

6,566

Used waste heat recovery to reduce use of steam in the preparation of heated pure water

Heat

2,175

110

4,867

Subtotal (11 key initiatives)

98,401

6,548

97,365(Portion attributable to four key initiatives involving increases in use of renewable energy)(74,084)(3,651) （65,058)

Others (537 initiatives)

45,031

3,611

Total (all initiatives in Japan)

143,432

10,159 166,186

Installation of megasolar power system (1,553 kW capacity)

68,821| Horizontal Deployment and Further Strengthening of Energy-Saving Working Groups,Q-DSDQOHDGHUVRIGRPHVWLFVLWH8WLOLW\&RQWURO*URXSVZKLFKRYHUVHHHQHUJ\DQGZDWHUVXSSOLHVDQGZDVWHZDWHUWUHDWPHQWKROGTXDUWHUO\8WLOLW\&RQWURO/LDLVRQ:RUNLQJ*URXSFRQIHUHQFHV$FHQWUDOIRFXVRIFRQIHUHQFHVLV(QHUJ\6DYLQJZRUNLQJJURXSV+HUH8WLOLW\&RQWURO*URXSPDQDJHUVDUHMRLQHG
E\UHSUHVHQWDWLYHVRIWKH3URGXFWLRQ0DQDJHPHQW'HSDUWPHQWZKRDUHFXUUHQWO\DVVLVWLQJZLWKHIIRUWVWRSUHSDUHDPDQXDORXWOLQLQJNH\HQHUJ\VDYLQJ
measures, compile best practice case studies, discover and test new methods for reducing energy consumption, consider the use of renewable energy as away to reduce carbon, and conduct energy-saving analyses at sites nationwide.
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energy-saving initiatives, procedures for formulating energy-saving plans, creating energy management standards, approaches to benchmarks for gauging
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not limited to individuals directly responsible, but also include pertinent department and plant general managers.
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Utility Control Liaison Working Group Initiatives for Fiscal Year 2019
Responses to global
warming

3URPRWHHQHUJ\VDYLQJLQLWLDWLYHVDQGORZFDUERQL]DWLRQ(QHUJ\6DYLQJZRUNLQJJURXSVMaintenance ofpower facilities

5HGXFHSUREOHPVZLWKSRZHUIDFLOLWLHVDQGLQFUHDVHLQYHVWPHQWHIILFLHQF\
5HGXFHSUREOHPVZLWKHOHFWULFHTXLSPHQWDQGIRVWHUDQHZJHQHUDWLRQRIH[SHUWV
Implement measures to increase the stability of wastewater treatment

3RZHU)DFLOLW\:RUNLQJ*URXS(OHFWULF7HFKQRORJ\:RUNLQJ*URXS:DVWHZDWHU7UHDWPHQW:RUNLQJ*URXSResponses toenvironmental risks(QVXUHDFFXUDWHJUDVSRIDLUDQGZDWHUTXDOLW\&UHDWHIUDPHZRUNIRUHQVXULQJWKHVZLIWVWDUWXSRIXWLOLWLHV %&3(QYLURQPHQWDO5LVN3URMHFW

Cost reductions/RZHUXWLOLWLHVFRVWVDQGWKHFRVWRIFRQVXPDEOHVDQGLQWHUPHGLDWHPDWHULDOV&RVW5HGXFWLRQ3URMHFW

DIC Report 2019

82

ESH

Energy-Saving Analyses

Energy-Saving working groups

Policy: Promote resolute energy-saving initiatives andforward-looking decarbonization measures(1) Conduct energy-saving analyses (2) Follow up on remedial measures(3) Compile best practice case studies and discover new themes for horizontal deployment (4) Advance the use of solar power(5) Explore the feasibility of installing biomass boilers (6) Foster energy-saving experts,Q¿VFDO\HDUHQHUJ\VDYLQJDQDO\VHVZHUHFRQGXFWHGDWIRXU',&*URXSVLWHVLQ-DSDQ ',&(3&RUS¶V6RGHJDXUD3ODQW6HLNR30&¶V+DULPD3ODQW',&¶V
&KLED3ODQWDQG',&*UDSKLFV¶7RN\R3ODQW $QDO\VHVIRFXVHGRQLPSURYLQJWKHSHUIRUPDQFHRIHQHUJ\FRQYHUVLRQHTXLSPHQWLQFOXGLQJFRPSUHVVRUVFKLOOHUVERLOHUVDQGVXEVWDWLRQVGHFUHDVLQJHQHUJ\ORVVHVE\HQHUJ\FRQVXPLQJHTXLSPHQWLPSURYLQJHQHUJ\FRQVHUYDWLRQHQKDQFLQJHQHUJ\PDQDJHPHQWDQGGHSOR\LQJ
EHVWSUDFWLFHVDWRWKHUVLWHV$QDO\VLVWHDPVFRQVLVWLQJRIPHPEHUVRI(QHUJ\6DYLQJZRUNLQJJURXSVIURPDFURVVWKHFRXQWU\DUHGLVSDWFKHGWRVLWHVWRFRQGXFW
audits. This process is also used as a training opportunity for site energy managers, young mid-career individuals in charge of energy management at their respective
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Reducing Energy Consumption and Enhancing ProductQuality through Kaizen Skill Improvement Training

Number of Employees Completing Kaizen Training(Cumulative)+DYLQJUHFRJQL]HGWKDWHQKDQFLQJWKHDZDUHQHVVRIHPSOR\HHVLQSURGXFWLRQDQGSURYLGLQJWKHP
with the tools to continuously improve their work are crucial to strengthening front-line capabilities,
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structured around four themes, namely, reducing energy consumption, increasing yields, enhancing
SURGXFWTXDOLW\DQGUDWLRQDOL]LQJRSHUDWLRQV²VHHNVWRIRVWHUSURIHVVLRQDOVZKRFDQLGHQWLI\DQG
resolve issues on their own initiative. Participants spend one year participating in initiatives aimed
DWLPSURYLQJTXDOLW\FRQWUROPHWKRGVDQGWKHIROORZLQJ\HDUSXWWLQJWKHLU¿QGLQJVLQWRSUDFWLFH(DFK'HFHPEHUDFKLHYHPHQWVDUHSUHVHQWHGDWDEULH¿QJDWWHQGHGE\SHUWLQHQWSODQWJHQHUDOPDQDJHUVDQGH[HFXWLYHV
6LQFH',&KDVDOVRRIIHUHGWKH.DL]HQ,QLWLDWLYH,QVWUXFWRU7UDLQLQJSURJUDPGHVLJQHGWRHTXLSHPSOR\HHVZKRKDYHFRPSOHWHGWKH.DL]HQ6NLOO,PSURYHPHQW7UDLQLQJSURJUDPZLWKthe leadership and educational skills necessary to serve as instructors for the program. As of the
HQGRIILVFDO\HDUDFXPXODWLYHWRWDORIHPSOR\HHVIURPSHUWLQHQW',&VLWHVLQ-DSDQKDGFRPSOHWHG.DL]HQWUDLQLQJZLWKVXEVHTXHQWO\JRLQJRQWRHDUQDFFUHGLWDWLRQDVSURJUDP
instructors, adding momentum to energy-saving and other initiatives.

Improving Yields by Expanding Use of a System to Enhance
the Visibility of Energy Consumption

Kaizen Initiative Instructor Training (Cumulative) program
Kaizen Skill Improvement Training (Cumulative) program(Employees)

500
450
400
350

A cumulative total of 384 employees havecompleted the Kaizen Skill Improvement
Training program,with 66 going on tocomplete the Kaizen Initiative Instructor
program since launch.

300
250

14

200

242

50

31

23

328

301

271

357

410

384

206

150
100

55
40

81

66

160
114

0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (FY)

Use of Electric Power in Electric Lighting over Three Years
350:LWKWKHDLPRIRSWLPL]LQJHQHUJ\XVHRQDIDFLOLW\E\IDFLOLW\EDVLV',&GHYHORSHGDV\VWHPWKDWPHDVXUHVPRQLWRUVDQGYHULILHVZDVWH
and irregularities in use in real time, thereby enhancing the visibility of
HQHUJ\FRQVXPSWLRQ7KHV\VWHPLVDOVRXVHIXOIRUYHULI\LQJWKHEHQH¿WV
of energy-saving initiatives implemented, underscoring its role as an
essential tool for promoting the reduction of energy consumption. At
SUHVHQW',&LVJUDGXDOO\LQWURGXFLQJDYLVLELOLW\HQKDQFLQJV\VWHPWKDWDOVRDQDO\]HVSURFHVVVSHFLILFHQHUJ\FRQVXPSWLRQIRULQGLYLGXDO
products and lots. The Company has installed the system on the V
SURGXFWLRQÀRRURIWKH&KLED3ODQWWKH&SURGXFWLRQÀRRURIWKH.DVKLPD
3ODQWDQGWKH%SURGXFWLRQIORRURIWKH6DNDL3ODQWDQGLVXVLQJLWWR
SURPRWHWKHUHSURGXFWLRQRSWLPXP\LHOGVIRUPDWHULDOVLQSXWV,Q¿VFDO
year 2016, a more advanced version of the system was installed at the<RNNDLFKL3ODQW/RRNLQJDKHDGWKH&RPSDQ\ZLOOFRQWLQXHWRSURPRWH
adoption at other sites.

331

330

322

320
316

310

308
297

306

290

301

294

298

290
280

290

313

312
309

309
305

303

312
304

309
302

295

287

299
298
290

272

275

270
270

266

256

Benefits of promoting
a shift to LED lighting

258

249

250

240

230

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.
2016

DIC Report 2019

83

Oct.

Nov.

2017

Dec.
2018

ESH

5

Reducing Fossil Fuel Use by Promoting the Use of Renewable Energy
Renewable energy as a percentage of total energy used by the DIC Group in Japan: 12.1%

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XSIURP¿VFDO\HDUDQGUHSUHVHQWLQJRIWRWDOHQHUJ\ KHDWDQGHOHFWULFSRZHU FRQVXPSWLRQE\WKHVHFRPSDQLHV7KLVLQFUHDVHZDVDWWULEXWDEOHWRWKHVWDEOHRSHUDWLRQRIDQH[LVWLQJELRPDVVERLOHUHIIRUWVWRDFKLHYHDQRSWLPDOPL[RISRZHUVRXUFHV ELRPDVVERLOHUZLQGSRZHUVRODUSRZHUDFRJHQHUDWLRQV\VWHPDQGSXUFKDVHGHOHFWULFSRZHU DQGWKHVWDUWXSRIDPHJDVRODUSRZHUV\VWHP FRPSULVLQJZDWWSDQHOVZLWKDWRWDOVXUIDFH
DUHDRIP2 ZLWKDJHQHUDWLQJFDSDFLW\RI0: -DQXDU\ DWWKH.DVKLPD3ODQW -DQXDU\ DQGWKHIXOOVFDOHVWDUWXSRIDELRPDVVERLOHUZLWKDQHYDSRUDWLRQUDWHRIPHWULFWRQQHVKRXUDWWKH+RNXULNX3ODQW -DQXDU\ 7KHXVHRIUHQHZDEOHHQHUJ\DFFRXQWHGIRUDPHWULFWRQQH
reduction of CO2HPLVVLRQVLQ-DSDQIURPWKH¿VFDO\HDUOHYHODFFRXQWLQJIRURIWKHWRWDOUHGXFWLRQDFKLHYHGE\WKH*URXSLQWKHSHULRG(DUO\LQ¿VFDO\HDU',&FRPSOHWHGWKHLQVWDOODWLRQRIVRODUSRZHUV\VWHPVDW¿YHVLWHV7KHVHIDFLOLWLHVZKLFKZLOOSURGXFHDFRPELQHGWRWDORI
0:RIHOHFWULFSRZHUDQQXDOO\EHJDQRSHUDWLQJLQ-DQXDU\3DUWLFXODUO\QRWDEOHLVWKHV\VWHPHVWDEOLVKHGDWWKH7DWHED\DVKL3ODQWZKLFKERDVWVDQDQQXDOJHQHUDWLQJFDSDFLW\RI0:²VHFRQGRQO\WRWKH.DVKLPD3ODQW¶VPHJDVRODUSRZHUV\VWHP²DQGDFFRXQWVIRUDSSUR[LPDWHO\RIWKHHOHFWULF
SRZHUXVHGDQQXDOO\E\WKHSODQW*RLQJIRUZDUG',&ZLOOFRQWLQXHWRWDNHGHFLVLYHVWHSVWRDGYDQFHLWVXVHRIUHQHZDEOHHQHUJ\ZLWKWKHDLPRIDFKLHYLQJ
its long-term target for reducing emissions of CO2DFURVVJOREDO',&*URXSVLWHVE\IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU

Up to and including
fiscal year 2017
Biomass boiler(wood chip–fired)・Heat produced in fiscal year 2018:
515,000 GW(Electric power produced included:
15,872,000 kWh)・Annual generating capacity up to
and including fiscal year 2018:
Approximately 4.0 MWh

Wind power

Kashima Plant

Hokuriku Plant

・Steam produced: Maximum 30 metric tonnes/hour

・ Steam produced: Maximum 2.5
metric tonnes/hour
・ All steam produced used in
production processes

・Approximately half of steam generated used in
production processes
・Remainder of steam produced used to power
turbine generating electric power for internal use

Fiscal year 2019

Plan for fiscal year 2020
(under consideration)

-

-

-

-

・ No electric power generating function
・ Commenced operation in January 2018

・Generating capacity: 4,000 kW

Kashima Plant

・Electric power generated
・Generating capacity: 4,600 kW
in fiscal year 2018: 5,379,000 kWh
・Annual generating capacity up to ・Facility: Two 2,300 kW–capacity wind turbines
and including fiscal year 2018:
Approximately 4.6 MWh

Kashima Plant
Solar power

Fiscal year 2018

・Generating capacity: 100 kW

DIC Decor, Inc.

・Electric power generated
in fiscal year 2018: 1,968,000 kWh ・Generating capacity: 20 kW
・Annual generating capacity up to
and including fiscal year 2018:
Approximately 5.2 MWh-

Kashima Plant
・Generating capacity: 1,600 kW
・Number of panels: 5,588 (each 278 W)
・Commenced operation in January 2018

Tatebayashi Plant

Central Research Laboratories

・Total generating capacity:
2,000 kW・Generating capacity: 40 kW

Yokkaichi Plant

・Generating capacity: 20 kW

Chiba Plant

・Generating capacity: 100 kW

Saitama Plant

・Generating capacity: 30 kW

0HJDVRODUSRZHUV\VWHPDWWKH.DVKLPD3ODQW 0:

10 sites

・Generating capacity: 1,270 kW

0HJDVRODUSRZHUV\VWHPDWWKH7DWHED\DVKL3ODQW 0:

DIC Report 201984

Total: 1,500 kW

Note: All facilities commenced
operation in January 2019.

%LRPDVVERLOHUDWWKH+RNXULNX3ODQW

ESH

CO2 Emissions Reductions
at the Kashima Plant(January–December 2018)

Reduction in CO2 Emissions by the DIC Group in Japan
Attributable to the Use of Renewable Energy(Metric tonnes)(Reduction (%))

Reduction attributable to use ofwood biomass energy

metric40,00016%

35,00014%

30,00010,46925,00021,937

10,000

10,32012,76220,00015,00011,61011,301

24,7885,000

15,093

20,471

Steam generated using
renewable energy (heat)

2014

2015

2016

12%
10%

Reduction attributable touse of wind power

24,921

6%

ResultReduction in CO2 emissions(January–December 2018)

4%
2%

0
2013

of CO 28%

9,850
20,412-32,857 tonnes

20172018 (FY)-2,690 -984
metrictonnesof CO 2

metrictonnesof CO 2

-36,5300%metric tonnes

Impact of use of renewable energy(contribution to reduction in CO2 emissions (%))

Electric power generatedusing renewable energy(electric power)

Reduction attributable touse of solar power

Independent Electric Power Generation: 24.0% of Total Consumption in Japan(OHFWULFSRZHUFRQVXPSWLRQE\WKH',&*URXSLQ-DSDQLQ¿VFDO\HDUURVHIURPWKHSUHYLRXV¿VFDO\HDUWRN:K
DSSUR[LPDWHO\RIZKLFKZDVJHQHUDWHGLQGHSHQGHQWO\ZLWKHOHFWULFSRZHUJHQHUDWHGXVLQJUHQHZDEOHHQHUJ\DFFRXQWLQJIRUDQG
HOHFWULFSRZHUJHQHUDWHGXVLQJFRJHQHUDWLRQV\VWHPVUHSUHVHQWLQJ,QGHSHQGHQWO\JHQHUDWHGHOHFWULFSRZHUZDVXSIURPWKH
SUHYLRXV¿VFDO\HDURZLQJWRDQLQFUHDVHLQVRODUSRZHU
Portion of Purchased Electric Power Replaced with Low-Carbon Alternative
2ZLQJWRDQLQFUHDVHLQFRQVXPSWLRQHOHFWULFSRZHUSXUFKDVHGE\',&*URXSFRPSDQLHVLQ-DSDQURVHDSSUR[LPDWHO\LQ¿VFDO\HDU%HFDXVHSXUFKDVHGHOHFWULFSRZHUDFFRXQWVIRUDURXQGRIWKHHOHFWULFSRZHULWXVHVWKH&RPSDQ\VRXJKWWRUHGXFHWKH&22
footprint of its purchased electric power by replacing a portion thereof with a low-carbon alternative. This accounted for a reduction in CO2
HPLVVLRQVRIPHWULFWRQQHV&22RUIURP¿VFDO\HDU',&ZLOOFRQWLQXHWRSURPRWHWKHSURFXUHPHQWRIJUHHQHOHFWULFSRZHUE\UHYLHZLQJWKHFRPSDQLHVIURPZKLFKLWSXUFKDVHVHOHFWULFSRZHUDQGSULRULWL]LQJWKRVHZLWKDORZ&22 emissions factor.

Electric Power Used by the DIC Group in Japan by Energy Source(Thousand kWh)

300,000

Electric power generatedusing renewable energy

8%200,000

Electric power generated
through cogeneration

16%

100,000

Purchased electric power

Breakdown ofElectric Power Used by
the DIC Group in Japanin Fiscal Year 2018
by Energy Source

76%
0

13

14

15

16

Electric power generated using renewable energy
Electric power generated through cogeneration

6

17

18（FY）

Purchased electric power

Development of a Weather Forecast Data–Based Renewable Energy Solution

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DIC Report 2019

85

ESH

VOICE DIC has switched from manual to automatic control for adjusting supplies of electric power.
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ORRNIRUZDUGWRXVLQJP\SRVLWLRQDVDQHQJLQHHUZLWKJOREDOFUHGHQWLDOVWRDFWDVEULGJHEHWZHHQP\KRPHFRXQWU\RI0DOD\VLDDQG-DSDQDV
well as to contributing to both countries and the world at large.
Process Automation Engineering Group, Corporate Engineering Department, Chiba Plant

Mohammad Farhan Bin Mohd Fauzi

VOICE We were tasked with developing a weather forecast data–based system for using renewable energy.
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skills served him well. The system he has built for us will both reduce CO2HPLVVLRQVDQGLQFUHDVHRXURSHUDWLQJHI¿FLHQF\:KLOHWKHUHZHUHPDQ\KXUGOHVSDUWLFXODUO\LQVHOHFWLQJDFRPSDQ\WRSURYLGHZHDWKHUUHODWHGLQIRUPDWLRQWKDWVDWLV¿HGRXUUHTXLUHPHQWVGHYHORSLQJORJLFDQGFUHDWLQJD
method for importing website weather data, I was impressed by his ability to resolve any issues that cropped up, seeking the assistance of the Utility&RQWURO*URXSDQGKLVPRUHH[SHULHQFHGFROOHDJXHVZKHQQHFHVVDU\DQGSUHVVRQZLWKWKHWDVNDWKDQG
,ORRNIRUZDUGWRVHHLQJ0U)DUKDQWDNHRQQHZFKDOOHQJHVDQGDFKLHYHRXWVWDQGLQJUHVXOWVDQGDPFRQ¿GHQWWKDWKLVWDOHQWIRUFUHDWLYH
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General Manager, Process Automation Engineering Group, Corporate Engineering Department, Chiba Plant

T

Kazuyuki Nagata

PIC
DIC Wins New Energy Foundation Chairman’s Award in the Adoption and Application Category of the 2018 New Energy Awards,Q'HFHPEHU',&ZRQD1HZ(QHUJ\)RXQGDWLRQ&KDLUPDQ¶V$ZDUGLQWKH$GRSWLRQDQG$SSOLFDWLRQ&DWHJRU\RIWKH1HZ(QHUJ\$ZDUGVLQUHFRJQLWLRQRIWKHH[SDQGHGXVHRIUHQHZDEOHHQHUJ\DWWKH.DVKLPD3ODQW7KHDZDUGVSURJUDPZKLFKZDVSUHVHQWHGE\WKH1HZ(QHUJ\)RXQGDWLRQZDVHVWDEOLVKHGZLWKWKH
DLPRIHQFRXUDJLQJWKHLQWURGXFWLRQRIQHZHQHUJ\DQGSURPRWLQJDZDUHQHVVE\FRPPHQGLQJSDUWLFXODUO\H[FHOOHQWLQLWLDWLYHV
7KH.DVKLPD3ODQWKDVLQVWDOOHGPXOWLSOHUHQHZDEOHHQHUJ\±SRZHUHGJHQHUDWLQJIDFLOLWLHVLQFOXGLQJELRPDVVDQGPHWKDQHJDVERLOHUVDVZHOODVZLQGSRZHUDQG
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facilities also contributed to a reduction in annual CO2HPLVVLRQVLQ¿VFDO\HDURIPRUHWKDQPHWULFWRQQHV/RRNLQJDKHDGWKHGHSDUWPHQWUHVSRQVLEOH
IRUWKHSODQW¶VHQHUJ\VXSSO\ZLOOFRQWLQXHZRUNLQJWRHQKDQFHWKHFRPEXVWLRQHI¿FLHQF\RIJHQHUDWLQJIDFLOLWLHVLQFOXGLQJELRPDVVDQGPHWKDQHJDVERLOHUVE\
upgrading maintenance and management technologies and accumulating know-how.
7KH&KDLUPDQ¶V$ZDUGUHFRJQL]HVWKHSRVLWLYHUHVXOWVRIWKHVHVWHDGIDVWHIIRUWV',&ZLOOGHSOR\NQRZKRZDFFXPXODWHGE\WKH.DVKLPD3ODQWDWVLWHVERWKLQ-DSDQ
and overseas with the aim of increasing its use of renewable energy and reducing its emissions of greenhouse gases around the world.

Reductions in Annual CO2 Emissions Attributable to the Use of Renewable Energy at the Kashima Plant%LRPDVVERLOHU$QQXDOUHGXFWLRQPHWULFWRQQHV:LQGSRZHUV\VWHP$QQXDOUHGXFWLRQ
2,200 metric tonnes)

0HWKDQHJDVERLOHU$QQXDOUHGXFWLRQPHWULFWRQQHV

DIC Report 2019

86

0HJDVRODUSRZHUV\VWHP$QQXDOUHGXFWLRQPHWULFWRQQHV

ESH

VOICE Our goal is to optimize the Kashima Plant’s energy mix.
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WKHRSHUDWLQJVWDWXVRISURGXFWLRQÀRRUV2SHUDWLRQDOPDQDJHPHQWDWWKH.DVKLPD3ODQWLVQRWVRPHWKLQJ\RXFDQH[SHULHQFHDWDQ\RWKHUVLWH,Q
DGGLWLRQEHFDXVHHQHUJ\FRQVXPSWLRQDQGHQHUJ\XVDJHYDU\IURPRQHSURGXFWLRQÀRRUWRDQRWKHUZHPXVWSURPRWHUDWLRQDOL]DWLRQLQDPDQQHUWKDWWDNHVLQWRDFFRXQWWKHHTXLSPHQWDQGRSHUDWLQJPHWKRGVHPSOR\HGRQHDFKÀRRU0\MRELVFKDOOHQJLQJEXWPDQ\DVSHFWVRILWDUHUHZDUGLQJ/RRNLQJDKHDGZHDLPWROHYHUDJH,R7DQG$,WHFKQRORJLHVDVZHOODVWRÀDWWHQRXWHQHUJ\GHPDQGZLWKWKHDLPRIEXLOGLQJDPRUHUREXVWHQHUJ\QHWZRUN
Utility Control Group, Kashima Plant

Rina Kawano

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LWVHQHUJ\PL[8QOHVV\RXXQGHUVWDQGWKHVWDWXVRIRWKHUVLWHVLWLVGLI¿FXOWWRXQGHUVWDQGWKH.DVKLPD3ODQW¶VXQLTXHQDWXUH,ORRNIRUZDUGWRVHHLQJKHUJURZDVRQHRI',&¶V¿UVWIHPDOHHQHUJ\PDQDJHUVE\FDSLWDOL]LQJRQKHURSWLPLVWLFSHUVRQDOLW\DQGJDLQLQJDZLGHUDQJHRIH[SHULHQFH

General Manager, Utility Control Group, Kashima Plant

7

Ichirou Kawase

Protecting the Ozone Layer+\GURIOXRURFDUERQV +)&V DUHXVHGZLGHO\DVUHIULJHUDQWVLQHTXLSPHQWDQGIDFLOLWLHV:KLOHQRWDQR]RQHGHSOHWLQJVXEVWDQFH+)&VKDYHDJOREDOZDUPLQJ
potential 100–10,000 times that of CO2DQGWKHLUXVHLVH[SHFWHGWRDFFRXQWIRUD&LQFUHDVHLQWKHJOREDODYHUDJHWHPSHUDWXUHE\WKHHQGRIWKHVWFHQWXU\$W
WKHWK0HHWLQJRIWKH3DUWLHVLQ.LJDOL5ZDQGDKHOGLQ2FWREHUWKH3DUWLHVWRWKH0RQWUHDO3URWRFRORQ6XEVWDQFHVWKDW'HSOHWHWKH2]RQH/D\HUUHDFKHG
DQDJUHHPHQWWRSKDVHGRZQSURGXFWLRQDQGXVHRI+)&V WKH.LJDOL$PHQGPHQW -DSDQVXEVHTXHQWO\DPHQGHGLWV$FWRQWKH3URWHFWLRQRIWKH2]RQH/D\HU
7KURXJKWKH&RQWURORI6SHFL¿HG6XEVWDQFHVDQG2WKHU0HDVXUHVLQOLQHZLWKWKHDPHQGPHQWZKLFKDVRI-DQXDU\KDGEHHQUDWL¿HGE\3DUWLHV+DYLQJ
VXUSDVVHGWKHFRQGLWLRQRIUDWL¿FDWLRQE\DWOHDVW3DUWLHVWKH.LJDOL$PHQGPHQWHQWHUHGLQWRIRUFHRQ-DQXDU\
,Q$SULO-DSDQUHYLVHGWKH)OXRURFDUERQV5HFRYHU\DQG'HVWUXFWLRQ/DZ7KHVDPHPRQWKWKH$FWRQ5DWLRQDO8VHDQG3URSHU0DQDJHPHQWRI)OXRURFDUERQVHQWHUHGLQWRIRUFH DIC Group Leaks of Fluorocarbons in Japan (CO2 Equivalent)compelling stakeholders to ascertain and report leaks of fluorocarbons from commercial t-CO (Metric tonnes CO )120%
700
equipment and facilities.
600
,Q¿VFDO\HDU',&UHSRUWHGOHDNVRIÀXRURFDUERQVHTXLYDOHQWWRPHWULFWRQQHVRI
100%
CO2 &RPSDQLHVDUHREOLJHGWRUHSRUWOHDNVLQH[FHVVRIPHWULFWRQQHVWRWKH-DSDQHVH
50080%DXWKRULWLHV 7KLVUHSUHVHQWVDGHFOLQHIURPPHWULFWRQQHVLQ¿VFDO\HDUWKH
400
60%\HDUWKH$FWRQ5DWLRQDO8VHDQG3URSHU0DQDJHPHQWRI)OXRURFDUERQVHQWHUHGLQWRIRUFH7KH
300
40%',&*URXSZLOOFRQWLQXHWRVHOHFWDLUFRQGLWLRQLQJDQGRWKHUHTXLSPHQWXVLQJQRQÀXRURFDUERQV
200
and other refrigerants that do not negatively impact the environment with the aim of reducing
20%
100
WKHYROXPHRIÀXRURFDUERQOHDNDJHIRUZKLFKLWLVUHVSRQVLEOH
0
2

2

2015
DIC

8

2016

2017

DIC Group companies in Japan

2018

(FY)

0%

Change from fiscal year 2015

Energy Consumption and CO2 Emissions by the DIC Group Overseas:KLOHSURGXFWLRQYROXPHE\WKH',&*URXSRYHUVHDVLQ¿VFDO\HDUHGJHGXSIURP¿VFDO\HDUHQHUJ\FRQVXPSWLRQVOLSSHG²D
GHFOLQHIURPWKH¿VFDO\HDUEDVH\HDU²DQGHQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQGHFOLQHGRUIURP¿VFDO\HDU&22 emissions by
RYHUVHDV*URXSFRPSDQLHVLQ¿VFDO\HDUGHFUHDVHGRUIURPWKHEDVH\HDUDQG&22HPLVVLRQVSHUXQLWRISURGXFWLRQZHUHGRZQRU
IURP¿VFDO\HDU
Factors contributing to the decline in CO2HPLVVLRQVLQFOXGHGHIIRUWVE\LQGLYLGXDOFRPSDQLHVWREUHDNGRZQWKH*URXS¶VHPLVVLRQVUHGXFWLRQWDUJHWVDQGSURPRWHGHFDUERQL]DWLRQLQLWLDWLYHVWKHVWDUWXSRIDELRPDVVERLOHUDW+DLQDQ',&0LFURDOJDH&R/WGDQGDVRODUSRZHUV\VWHPDW4LQJGDR',&
)LQHFKHPLFDOV&R/WGLQWKH35&WKHVWDUWXSRIDVRODUSRZHUV\VWHPDW6LDP&KHPLFDO,QGXVWU\LQ7KDLODQGDQGWKHUHSODFHPHQWRIDSRUWLRQRIWKH
FRDOXVHGWR¿UHERLOHUVZLWKSDOPNHUQHOVKHOOV 3.6 DW37',&*UDSKLFV¶.DUDZDQJ3ODQW ,QGRQHVLD LQWKH$VLD±3DFL¿FUHJLRQDQGWKHLQVWDOODWLRQRIDGGLWLRQDOVRODUSRZHUV\VWHPVDQGLQLWLDWLYHVDLPHGDWLPSURYLQJSURGXFWLRQHI¿FLHQF\LQWKH$PHULFDVDQG(XURSH

DIC Report 2019

87

ESH

CO2 Emissions by the DIC Group Overseas and Change fromBase Year (Fiscal Year 2013)(Metric tonnes)

CO2 Emissions per Unit of Production by the DIC Group Overseas
and Change from Base Year (Fiscal Year 2013)(Metric tonnes)（%）

500,000
450,000(Reduction (%))

420

110

110

400

100

100

380

400,000

90

90
360

350,000

80

80
340

300,000
250,000
200,000
2013

2014

2015

2016

DIC Group overseas

2017

70

320

60

300

70

2013

2018 (FY)

2014

2015

2016

DIC Group overseas

Change from fiscal year 201320172018 (FY)60

Change from fiscal year 2013

CO2 Emissions by Region(Metric tonnes)

FY2013

FY2014FY2015FY2016FY2017FY2018300,000
250,000
200,000
150,000
100,000
50,0000Americas and Europe

Greater China

Asia–Pacific region

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active and in so doing sets precedents for the global chemicals industry.
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young human resources.
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WKHUHGXFWLRQRIHQHUJ\FRQVXPSWLRQDQGGHFDUERQL]DWLRQDQGGHWHUPLQLQJUHODWHGDFWLRQSODQV$VSDUWRILWVHIIRUWWRHQVXUHDFKLHYHPHQWRIWKH&22HPLVVLRQVWDUJHWVHWIRUWKHJOREDO',&*URXSFRUSRUDWHKHDGTXDUWHUVDVVLVWVORFDO*URXSFRPSDQLHVE\IRUPXODWLQJDQGLPSOHPHQWLQJHQHUJ\VDYLQJSODQVSURPRWLQJRQJRLQJHQHUJ\VDYLQJDQDO\VHVWRVXSSRUWWKHLGHQWL¿FDWLRQRIHQHUJ\VDYLQJWKHPHVDQGWKHLPSOHPHQWDWLRQRIUHPHGLDOPHDVXUHVGHSOR\LQJDSUDFWLFDOHQHUJ\PDQDJHPHQWPDQXDODQGEHVWSUDFWLFHFDVHVWXG\PDWHULDOVWRHVWDEOLVKPDQDJHPHQWSUDFWLFHVDQGSURPRWHKRUL]RQWDOGHSOR\PHQWDQGODXQFKLQJDQGSURYLGLQJVXSSRUWIRUHQHUJ\VDYLQJDQGFDUERQUHGXFWLRQSURMHFWVDWVXLWDEOHVLWHVDIC Report 2019

88

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Energy-Saving Assessment Radar Chart forPT. DIC Graphics’ Karawang Plant
1 Management
5.0

11 Power leveling

2 Energy consumption

4.5
4.0
3.5
3.0
2.5

10 Boilers

3 Substations

2.0
1.5

'LVFXVVLRQZLWKH[WHUQDOFRQVXOWDQWVDW
37',&*UDSKLFV¶.DUDZDQJ3ODQW -XQH

1.0
0.5
0.0

4 Lighting

9 Compressors

8 Electric motors

5 Air conditioning
7 Cleaning towers

6 Refrigeration equipment

Full marks
TargetRoom for improvement
Average performance

Greater China(QHUJ\VDYLQJDQDO\VLVDW
37',&*UDSKLFV¶.DUDZDQJ3ODQW -XQH

7KH',&*URXS¶VVLWHVLQ*UHDWHU&KLQDZKLFKLQFOXGH5 'IDFLOLWLHVDFFRXQWIRUDSSUR[LPDWHO\RIWKH*URXS¶VWRWDO&22HPLVVLRQV:KLOHSURGXFWLRQYROXPHLQ¿VFDO\HDUZDVXSIURPWKHSUHYLRXV¿VFDO\HDUDQGIURPWKH¿VFDO\HDUEDVH\HDU&22HPLVVLRQVDFURVVWKHUHJLRQZHUHGRZQIURP¿VFDO\HDU
EXWXSIURPWKHEDVH\HDU$PRQJIDFWRUVFRQWULEXWLQJWRWKHGHFOLQHLQ&22 emissions were lower operating rates at plants responsible for energy-intensive products,
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/&PDWHULDOVDQGIDFWRUVQRWUHODWHGWRSURGXFWLRQLQFOXGLQJDQLQFUHDVHLQEDVHORDGHQHUJ\FRQVXPSWLRQDWWULEXWDEOHWRWKHH[SDQVLRQRIÀRRUVSDFHDWUHVHDUFKIDFLOLWLHVDQG
higher operating rates for clean rooms.
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GHWHUPLQLQJDFWLRQSODQV7KHFRQIHUHQFHDOVRLQFOXGHVSUHVHQWDWLRQVLQWURGXFLQJFDVHVWXGLHVDQGSODQVIRUIXWXUHLQLWLDWLYHV7KHREMHFWLYHRIWKHFRQIHUHQFHLVWRSURYLGH
information on the status of regional energy management and energy-saving initiatives to help individual companies to enhance their performance.
Other efforts include promoting energy-saving analyses to gauge the status of energy management and the performance of energy -related equipment. This includes having
ORFDOHPSOR\HHVGHVLJQDWHG³HQHUJ\PDVWHUV´DVVHVVHQHUJ\VDYLQJSURPRWLRQIUDPHZRUNVDFWXDOHQHUJ\FRQVXPSWLRQWKHIRUPXODWLRQRISROLFLHVDQGPDQDJHPHQWRIWDUJHWVand the performance of key equipment. Findings are plotted on a radar chart to identify strengths and weaknesses and encourage remedial measures.

Energy-Saving Assessment Radar Chart for Changzhou Huari New Material Co., Ltd.
1 Management
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

11 Power leveling

10 Boilers

2 Energy consumption

3 Substations
Suggesting remedial measures

9 Compressors

4 Lighting

8 Electric motors

5 Air conditioning

7 Cleaning towers
Full marks

Target6 Refrigeration equipment

Room for improvement

Average performance(QHUJ\VDYLQJDQDO\VLVDW&KDQJ]KRX+XDUL1HZ0DWHULDODIC Report 2019

89

ESH

| Adoption of Renewable Energy by DIC Group Companies Overseas$JDLQVWDJOREDOWUHQGWRZDUGGHFDUERQL]DWLRQLQFOXGLQJE\SRSXODUL]LQJWKHXVHRIUHQHZDEOHHQHUJ\',&*URXSFRPSDQLHVLQWKH$VLD±
3DFL¿FUHJLRQ*UHDWHU&KLQDDQGWKH$PHULFDVDQG(XURSHDUHPDNLQJXVHRIJRYHUQPHQWVXEVLGLHVDQGVXSSRUWWRIRUH[DPSOHLQVWDOOELRPDVVERLOHUVDQGVRODUSRZHUV\VWHPV,Q¿VFDO\HDUUHQHZDEOHHQHUJ\XVHGE\',&*URXSFRPSDQLHVRYHUVHDVDPRXQWHGWR*-XSIURP*-LQWKHSUHYLRXV¿VFDO\HDU37',&*UDSKLFV .DUDZDQJ3ODQW  ,QGRQHVLD

Project Launched to Reduce CO2 Emissions by Switching from Coal to PKS
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,Q¿VFDO\HDUWKH.DUDZDQJ3ODQWHDUQHGFHUWL¿FDWLRQXQGHU,62WKHJOREDOVWDQGDUGIRUHQHUJ\PDQDJHPHQWV\VWHPV$W
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considerable effort is required to remove the clinker (waste) after combustion. Corporate
headquarters plans to verify the effectiveness of a chemical that can be used to easily remove
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dispatched to the plant to conduct a multifaceted analysis including the energy situation and fuelcosts in Indonesia and propose a long-term plan for reducing CO2 emissions from independent
electric power generation.
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Installation of Solar Panels Reduces CO 2 Emissions
Siam Chemical Industry, which manufactures a broad range of polymer products, including synthetic resins, continues to see rising demand for
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Siam Chemical Industry (Thailand)

DIC Report 2019

90

Solar panels installed on a roof

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VOICE We continue to actively promote the use of renewable energy.
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H[SDQGRXUXVHRIUHQHZDEOHHQHUJ\Solar Cell Project Engineer and Maintenance Chief, Siam Chemical Industry Co., Ltd.

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Biomass Boiler Replaces Diesel-Fired Unit
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attention as a superfood, which it processes into nutritional supplements and natural food colorings. Until recently, the facility used a diesel¿UHGERLOHUWRSURGXFHWKHVWHDPQHFHVVDU\IRULWVSURGXFWLRQSURFHVVHVEXWLQ2FWREHULWVZLWFKHGWRDELRPDVVERLOHUWKDWXVHVZDVWHUXEEHUWUHHZRRGIURPWKHWKLQQLQJRIUXEEHUIRUHVWVDVIXHO7KHQHZERLOHUZDVLQRSHUDWLRQIRUWKHGXUDWLRQRI¿VFDO\HDUUHVXOWLQJLQDUHGXFWLRQRIPHWULFWRQQHVLQWKHIDFLOLW\¶V&22HPLVVLRQVIRUWKH\HDUHTXLYDOHQWWRRILWVHPLVVLRQVLQWKHSUHYLRXV\HDU7KLVDOVRDFFRXQWHGIRURIWKHRYHUDOOGHFUHDVHLQ&22HPLVVLRQVDFKLHYHGE\WKH',&*URXSLQ*UHDWHU&KLQDLQ¿VFDO\HDU

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Solar Power System Installation Helps Reduce Energy Consumption and CO 2 Emissions
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N:± FDSDFLW\VRODUSRZHUV\VWHPDW4LQJGDR',&)LQHFKHPLFDOVVOICE We take a bottom-up approach to fostering the next generation of energy managers.
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Energy Manager, Production Management Department

Satoshi Abe

Europe and the Americas
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the implementation of energy-saving initiatives and measures to improve productivity.
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as making use of biomass energy (landfill biogas), solar and small hydroelectric power, and employing
outsourcing, including contracting energy-efficiency consultants to advance the reduction of energy
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DPELWLRXVHQHUJ\VDYLQJDQGGHFDUERQL]DWLRQLQLWLDWLYHVDFURVV(XURSHDQGWKH$PHULFDVDIC Report 2019

91

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reduce electric power consumption by limiting the use of air conditioning in summer and winter through measures such as the introduction
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| Support for the TCFD
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Governance around climate-related risks and opportunities
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Actual and potential impacts of climate-related risks and opportunities on businesses, strategy and Ànancial planning

Strategy

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Processes used to identify, assess and manage climate-related risks
Risk
management

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standing) from a broader perspective, evaluating priority risks and abstracting issues and promoting countermeasures.
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Metrics and targets used to assess and manage relevant climate-related risks and opportunities
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VOICE We are promoting efforts to reduce greenhouse gas emissions based on our vision of the future role of energy in society.
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while at the same time keeping a close eye on technological progress and national energy policies.
Eﬃciency Manager, Production Management Department (Energy Management Planning and Promotion Oﬃcer)

DIC Report 201992

Kazuo Kawaguchi

ESH

Preventing Environmental Pollution

Basic Approach
The DIC Group works to grasp the environmental impact of its operating activities and promotes systematic measures to reduce its
environmental footprint. The Group also advances efforts aimed at preventing environmental pollution.

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Goals for fiscal year 2018

Achievement in fiscal year 2018

Reduce VOC emissions into the air.

• Reduce VOC emissions into the air.
• Establish reduction targets for individual
domestic sites and promote related
initiatives (cumulative total of targets fordomestic production facilities: 357 metrictonnes (-3.7% from fiscal year 2017)).

DIC Group (Japan): Total emissions of
366 metric tonnes (-1.3% from fiscal
year 2017)

Evaluation★★★

Goals for fiscal year 2019
• Reduce VOC emissions into the air.
• Establish reduction targets for individual
domestic sites and promote related initiatives(cumulative total of targets for domestic
production facilities: 366 metric tonnes(essentially level with fiscal year 2017)).

| Basic Policy Framework for Implementation
As chemicals companies handle a considerably greater volume and more diverse range of chemical substances than companies in otherindustries, they must be extremely vigilant to prevent discharges of such substances into the environment. DIC has worked to reduce
emissions into the air, water and soil of substances designated under the Pollutant Release and Transfer Register (PRTR) and of substances
WDUJHWHGXQGHUDYROXQWDU\VFKHPHFUHDWHGE\WKH-DSDQ&KHPLFDO,QGXVWU\$VVRFLDWLRQ -&,$ VLQFH¿VFDO\HDUZKLOHRWKHU',&*URXSFRPSDQLHVLQ-DSDQKDYHGRQHVRVLQFH¿VFDO\HDU
* The JCIA is a general incorporated association. As one of Japan’s major industry organizations, JCIA is a member of the International Council of Chemical Associations and pursues thehealthy development of the chemical industry with other chemical-industrial organizations around the world.

| Principal Initiatives in Fiscal Year 2018
1 Reducing Emissions of VOCs
+DYLQJVXFFHHGHGLQDFKLHYLQJDYROXQWDU\WDUJHW²VHWLQ¿VFDO\HDU²IRUUHGXFLQJHPLVVLRQVRI92&VLQWRWKHDLURIE\¿VFDO\HDU XVLQJ¿VFDO\HDUDVWKHEDVH\HDU IRUWKH',&*URXSLQ-DSDQGRPHVWLF*URXSFRPSDQLHVFRQWLQXHWRSXUVXHVWHDG\DQQXDO
reductions through facility improvements and emissions management.
,Q¿VFDO\HDUHPLVVLRQVRI92&VLQWRWKHDLUE\',&WRWDOHGPHWULFWRQQHVDQLQFUHDVHRIIURP¿VFDO\HDUZKLOH
WKRVHRIWKH',&*URXSLQ-DSDQDWPHWULFWRQQHVZHUHGRZQ7KHSULQFLSDOIDFWRUEHKLQGWKLVUHVXOWZDVWKH¿UPHVWDEOLVKPHQW
RILQLWLDWLYHVWRUHGXFHHPLVVLRQVRI92&VDWWKH6DLWDPD3ODQW2YHUVHDV*URXSFRPSDQLHVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ
continued to promote ongoing emissions reductions. In the PRC, in particular, the Group is updating equipment and stepping up emissions
PDQDJHPHQWSUDFWLFHVLQUHVSRQVHWRWKHWLJKWHQLQJRIORFDOUHJXODWLRQVJRYHUQLQJHPLVVLRQVRI92&V

Emissions of Targeted Chemical Substances into the Air

Emissions of VOCs DIC
into the Air in Fiscal
Year 2018(551 Substances, Including those Designated by the PRTR*, and One Substance Group)+ 8.5％(Metric tonnes)
1,000

00
DIC

11

12

14

15

16

17

-1.3％
from Àscal year 2017

366

192

371

177

385

189

382

354

189

466
13

208

0

261

283

555

745
310

561

500

from Àscal year 2017

DIC Group (Japan)

18

(FY)

DIC Group (Japan)* ,QFOXGHVFODVVFKHPLFDOVXEVWDQFHVGHVLJQDWHGXQGHU-DSDQ¶V3575VFKHPH

,Q¿VFDO\HDUWKH',&*URXSPRQLWRUHGGLVFKDUJHVRIFODVVFKHPLFDOVXEVWDQFHVGHVLJQDWHGE\WKH3575DQGRI3575
GHVLJQDWHGFKHPLFDOVXEVWDQFHV RWKHUWKDQFODVVVXEVWDQFHV DQGRQHVXEVWDQFHJURXS FKDLQK\GURFDUERQVZLWKXSWR±FDUERQDWRPV WDUJHWHGE\WKH-&,$'XULQJWKHSHULRG',&DQG',&*URXSFRPSDQLHVLQ-DSDQSURGXFHGRUXVHGDQGRIWKHVHVXEVWDQFHVUHVSHFWLYHO\LQXQLWVH[FHHGLQJPHWULFWRQQH

DIC Report 2019

93

ESH

Newly Installed Thermal Combustion System at DIC Graphics (Guangzhou) Facilitates theEfÀcient Treatment of VOCs
,Q$XJXVW',&*UDSKLFV *XDQJ]KRX LQVWDOOHGDUHJHUDWLYHWKHUPDOR[LGL]HUDV\VWHPIRUWKHUPDOO\GHFRPSRVLQJDQGGHRGRUL]LQJ92&VLQH[KDXVWJDVIURPSURGXFWLRQSURFHVVHV7KHQHZV\VWHPILOOVWKH
combustion chamber with a ceramic material that absorbs heat, making it possible to spontaneously combust
92&JDVVWUHDPVDQGDWDKLJKWHPSHUDWXUHXVLQJRQO\DVPDOODPRXQWRIDX[LOLDU\IXHO,QWKHSDVWDFWLYDWHG
FDUERQDGVRUSWLRQZDVXVHGWRGHVWUR\92&V%HFDXVHLWIDFLOLWDWHVWKHHI¿FLHQWWKHUPDOGHFRPSRVLWLRQDQG
GHRGRUL]DWLRQRIPHGLXPDQGORZGHQVLW\92&VWKHV\VWHPKDVFRQWULEXWHGWRDVLJQL¿FDQWUHGXFWLRQLQHQHUJ\consumption and maintenance requirements.

Targeted Chemical Substances for Which Emissions Exceeded
10.0 Metric Tonnes in Fiscal Year 2018

Number of Targeted Chemical Substances Used and/or
Produced in Amounts Exceeding 1.0 Metric Tonne
in Fiscal Year 2018DIC

DIC Group (Japan)

Emissions
into the environment

Emissions
into the environment

Ethyl acetate

tonnes71 metric

tonnes
121 metric

Methyl ethyl ketone

27 tonnes

46 tonnes

Toluenetonnes41 metric

47 metric
tonnesStyrene7 tonnes

metrictonnes36 metric

Acetonetonnes
8 metric

tonnes34 metric

Propyl alcohol

4 tonnes

metrictonnes19 metric

N-methylpyrrolidone

tonnes13 metric

tonnes13 metric

Butyl acetate

0 metric
tonnes10 metric
tonnesSubstance

Environmental Emissions of Targeted Chemical Substances(551 Substances, Including those Designated by the PRTR,
and One Substance Group) in Fiscal Year 2018
tonnes
192 metrictonnes27 metric
tonnes0 metric

7DNLQJ ILVFDO \HDU  DV WKH EDVH \HDU ',&Group companies in Japan have worked to
UHGXFH VXOIXU R[LGH 62[  DQG QLWURJHQ R[LGH
12[  HPLVVLRQV²NH\ FDXVHV RI DFLG UDLQ²
from boilers. The Group is also working to reduce
FKHPLFDOR[\JHQGHPDQG &2' DQLQGLFDWRURI
water quality deterioration in wastewater, thereby
enhancing its water quality management.
2YHUVHDV*URXSFRPSDQLHVDUHDOVRVZLWFKLQJ
fuel from diesel to natural gas and replacing dieselILUHGDQGKHDY\RLO±ILUHGERLOHUVZLWKZDVWHZRRG±
fired biomass boilers at sites with appropriate
LQIUDVWUXFWXUH7RUHGXFH&2'WKH*URXSLVSURPRWLQJthe reuse of water and installing environment-friendly
closed-loop recycling and wastewater treatment
systems at its sites that purify water to a level thatexceeds the legally mandated level.

SOx and NOx Emissions Volumes(Metric tonnes)
300

204
202

200

186
150
58

44

100

185
142

177
137

36 46

35 38

33 42

14

15

16

202

186
147

156
127

168

10 14

8 12

17

18 (FY)

090

13

SOx emissions

DIC

DIC Group (Japan)

NOx emissions

DIC

DIC Group (Japan)

COD(Metric tonnes)

1,000

500

810

Reducing SOx, NOx and COD

675

2

783

Emissions into soil

571

Emissions into water366
tonnes28 metric
tonnes0 metric844

DIC Group (Japan)

metrictonnes491

Emissions into the air

metric831

Emissions into soil

745

DIC

Emissions into water

495

Emissions into the air

metric

590

120

655

108

530

DIC Group (Japan)

527

DIC

Regenerative thermal oxidizer

0

90
DIC

13
DIC Group (Japan)

DIC Report 2019

94

14

15

16

17

18

(FY)

ESH

3

Complying with Regulations Governing Emissions of Dioxins

In Japan, the DIC Group monitors emissions of dioxins from waste incinerators that produce these byproducts, a group of compounds with varying
toxicities. At present, the Group has six such facilities. Continuous efforts to reduce emissions levels have enabled the Group to achieve results that
JUHDWO\VXUSDVVVWDQGDUGVVSHFL¿HGLQWKH/DZ&RQFHUQLQJ6SHFLDO0HDVXUHV$JDLQVW'LR[LQV

Dioxin Emissions from DIC Group Incinerators in Japan

Site

Chiba Plant (DIC)
Hokuriku Plant (DIC)

Scale of facility(Incinerating
capacity)

Waste gas

WastewaterStandard(ng-TEC/Nm3)

Emissions reported inÀscal year 2018 (ng-TEC/Nm3)

Emissions reported inÀscal year 2017 (ng-TEC/l)

3.0 metric tonne/hr

5

0.560

10

0.043

0.28 metric tonne/hr

50.00016100.00530.1 metric tonne/hr

10

1.3

NA

‒

Approx.

Standard(ng-TEC/l)

DIC Interior Co., Ltd.

Approx.

Hokkaido Plant(DIC Kitanihon Polymer Co., Ltd.)

Approx.

0.2 metric tonne/hr

10

0

NA

‒

Tohoku Plant(DIC Kitanihon Polymer Co., Ltd.)

Approx.

0.2 metric tonne/hr

100.00088

NA‒

Harima Plant(Seiko PMC Corporation)

Approx.

0.2 metric tonne/hr

10

0

NA

‒

4

Preventing Marine Pollution Resulting from Waste Plastic

In recent years, waste plastic and marine plastics have become issues of major concern worldwide. The DIC Group works to prevent pollution of theenvironment, particularly through measures to preclude leaks of raw materials from production facilities and the recycling of waste plastic generated
LQSURGXFWLRQSURFHVVHV,Q¿VFDO\HDUDSSUR[LPDWHO\RIZDVWHSODVWLFJHQHUDWHGE\WKH*URXSZDVUHF\FOHG$SSUR[LPDWHO\RIWKLVZDVUHXVHGLQFOXGLQJHQHUJ\UHFRYHUHGIURPIXHOXWLOL]DWLRQ/RRNLQJDKHDGZHZLOOVWHSXSHIIRUWVWRHQVXUHWKHDSSURSULDWHPDQDJHPHQWDQG
disposal of waste plastic at sites, as well as to organize projects involving the various departments in the packaging materials business tasked withworking actively to, among others, promote the collection of plastics and shift to alternative and/or biodegradable materials.
5

Ensuring the Appropriate Collection and Storage of PCBs

The DIC Group in Japan continues working to ensure the appropriate collection, storage and management of equipment containing polychlorinated
ELSKHQ\OV 3&%V LQFOXGLQJROGHUPRGHOWUDQVIRUPHUVFDSDFLWRUVDQGVWDELOL]HUVLQDFFRUGDQFHZLWKWKH/DZ&RQFHUQLQJ6SHFLDO0HDVXUHV$JDLQVW3&%:DVWH7KH*URXSDOVRHQVXUHVWKDW3&%VDUHGLVSRVHGRILQDFFRUGDQFHZLWKWKHSUDFWLFHVRI-DSDQ(QYLURQPHQWDO6WRUDJH 6DIHW\&RUSRUDWLRQ -(6&2 
6Responding to Asbestos Risks

7KH',&*URXSHQVXUHVDZDUHQHVVRISRWHQWLDOULVNVDVVRFLDWHGZLWKDVEHVWRVGXULQJGHPROLWLRQRUZKHQUHWUR¿WWLQJHTXLSPHQWDQGWDNHVFDUHWRUHVSRQGLQDQDSSURSULDWHPDQQHU,Q¿VFDO\HDUPDWHULDOVFRQWDLQLQJDVEHVWRVLQFOXGLQJLQVXODWLRQZHUHGLVFRYHUHGGXULQJWKHUHPRYDORI
equipment. These materials were removed and disposed of as required by law.

T

PIC

PT DIC Astra Chemicals Wins Award under DKI–Jakarta–Company Environment
Performance Appraisal Program,Q¿VFDO\HDU37',&$VWUD&KHPLFDOVZRQDQDZDUGIURPWKH6SHFLDO&DSLWDO5HJLRQRI-DNDUWD'DHUDK .KXVXV ,ERNRWD -DNDUWD '., -DNDUWD  LQ ,QGRQHVLDQ  XQGHU WKH '.,±-DNDUWD±&RPSDQ\
Environment Performance Appraisal Program. High marks were given to the company’s efforts to comply
with Indonesia’s environmental management laws and related regulations, as well as the excellence of
LWVV\VWHPVIRUPDQDJLQJWKHWUHDWLQJRILQGXVWULDOHIÀXHQWVDQGDLUSROOXWLRQ7KHVHDZDUGVDUHFRQIHUUHG
on companies demonstrating excellence in the area of environmental protection based on the results ofenvironmental performance audits of all companies in the Special Capital Region, which are conductedby the Jakarta government. PT DIC ASTRA Chemicals was one of only eight award winners chosen fromDPRQJPRUHWKDQ-DNDUWDEDVHGPDQXIDFWXUHUVDIC Report 2019

95

ESH

Reducing Industrial Waste
Basic Approach
In addition to recycling and reuse of materials, the DIC Group works to minimize the impact of its industrial waste disposal practices.

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives• Reduce industrial waste disposedof as landfill (“zero emissions”).
• Reduce industrial waste generated
by production facilities.

Promote recycling.

Goals for fiscal year 2018

Achievements in fiscal year 2018

Implement measures at each site with thefollowing goal:• Reduce industrial waste disposed of as landfill(for sites that have achieved “zero emissions,”
maintain that status) (cumulative total oftargets for domestic production facilities: 147
metric tonnes (-1% from fiscal year 2017)).

Promote recycling at DIC Group companies
and set a target for resource recycling rate.

Evaluation• Reduce industrial waste disposed of as landfill.
DIC Group (Japan): 19 6 metric tonnes(-5.0% from fiscal year 2016)• Industrial waste disposed of as landfill
DIC Group (Japan): 204 metric tonnes(+38.0% from fiscal year 2017)•Industrial waste generated byproduction facilities
DIC Group (Japan): 32,243 metrictonnes (-0.3% from fiscal year 2017)• D I C G r o u p (J a p a n) r e s o u r c e
recycling rate: 93.0% (essentiallylevel with fiscal year 2017)•A t arget was set for resourc e
recycling rate.

Goals for fiscal year 2019★

• Reduce industrial waste generated byproduction facilities.
DIC Group (Japan): 31,698 metric tonnes(-2.0% from fiscal year 2018).

★★

Promote recycling at DIC Group companies.

| Basic Policies and Framework for Implementation
7KH',&*URXSDLPVWRPLQLPL]HLQGXVWULDOZDVWHDQGSURPRWHWKHUHF\FOLQJDQGUHXVHRIPDWHULDOV6LQFHILVFDO\HDU',&KDV
SURPRWHG]HURHPLVVLRQVLQLWLDWLYHV DLPHGDWUHGXFLQJLQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OO',&KDVGHSOR\HG]HURHPLVVLRQVLQLWLDWLYHV
DW',&*URXSFRPSDQLHVLQ-DSDQVLQFH¿VFDO\HDU:LWKWKHDLPRIH[SDQGLQJHIIRUWVDFURVVWKHJOREDO',&*URXSLQ¿VFDO\HDU',&EHJDQWRLQWURGXFHPDQDJHPHQWE\REMHFWLYHV 0%2 DWRYHUVHDV*URXSFRPSDQLHV',&VXEFRQWUDFWVWKHWUHDWPHQWRILQGXVWULDOZDVWHWREHGLVSRVHGRIDVODQG¿OODQGHQVXUHVWKDWZDVWHLVSURSHUO\WUHDWHGE\SURPRWLQJVWULFWFRPSOLDQFHDQGRQVLWHFRQ¿UPDWLRQE\designated departments at each of its production facilities.
* =HURHPLVVLRQVLQLWLDWLYHV',&LVSURPRWLQJLQLWLDWLYHVDLPHGDWUHGXFLQJWKHYROXPHRIZDVWHGLVSRVHGRIDVODQG¿OOE\IURPWKH¿VFDO\HDUOHYHO| Principal Initiatives in Fiscal Year 2018
Reducing Industrial Waste Disposed of as LandÀll
7KH',&*URXSZRUNVDFWLYHO\WRUHGXFHLWVGLVSRVDORILQGXVWULDOZDVWHDVODQG¿OOE\UHF\FOLQJFLQGHUVGXVWDQGVOXGJHDPRQJRWKHUVLQWRURDGEHG
materials and raw materials for cement, using thermal recycling to recover waste heat and reducing production losses by increasing yields.

| Initiatives by the DIC Group in Japan,Q¿VFDO\HDUWKHWRWDOYROXPHRILQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OOE\WKH',&*URXSLQ-DSDQDPRXQWHGWRPHWULFWRQQHVOwing to market deterioration, DIC Interior Co., Ltd. and a number of other companies were forced to incinerate unnecessary items that
ZRXOGSUHYLRXVO\KDYHEHHQUHF\FOHG7KHUHVXOWLQJDVKZDVGLVSRVHGRIDVODQG¿OO,Q¿VFDO\HDUDOO',&*URXSFRPSDQLHVLQ-DSDQ
will step up the implementation of initiatives aimed at achieving zero emissions.
',&*URXSFRPSDQLHVLQ-DSDQDOVRFRQWLQXHGZRUNLQJWRHQVXUHWKHDSSURSULDWHGLVSRVDORI3&%V,QDGGLWLRQWKHVHFRPSDQLHVSURPRWHG
the rigorous management of unprocessed waste, including transformers, capacitors and stabilizers, through proper collection and storage indedicated warehouses.

DIC Report 2019

96

ESH

（Metric tonnes）
9,000

7,981

Industrial Waste Generated in
Fiscal Year 2018

Industrial Waste Disposed of as LandÀll

DIC Group (Japan)

Fiscal year 2018

97
148
100
204

Fiscal year 2018

97
183

1,288
312
991

537

metrictonnes

89
232
90
207
104
158
48
106
44
86
49
80
116
139

03

3,000

204

metrictonnes

128
537
125
320

02

100
1,560
2,296

3,426
4,326

from Àscal year 2017

5,581

0.3％

4,190

-

6,000

DIC Group(Japan)

DIC

07

09

16

17

0

00

01

04

05

06

08

10

11

12

13

14

15

18 （FY）（Base year）| Deployment of Comprehensive
Industrial Waste Management System

DIC,QILVFDO\HDUWKH',&*URXSLQ-DSDQH[SORUHGWKH
introduction and conducted tests of a comprehensive industrial
waste management system for use with the country’s Electronic
0DQLIHVW H0DQLIHVW V\VWHP7KHH0DQLIHVWV\VWHPPDQDJHVthe movement of industrial waste by facilitating the electronic
WUDQVPLVVLRQRIPDQLIHVWLQIRUPDWLRQDQGWUDFNLQJRIWKHÀRZRIZDVWHIURPJHQHUDWLRQWR¿QDOGLVSRVDO8QOLNHSDSHUPDQLIHVWVWKHH0DQLIHVWV\VWHPRIIHUVHDV\GDWDLQSXWDQGHOLPLQDWHVWKH
need for administrative reporting and storage by generators.
:LWKDQWLFLSDWHGUHYLVLRQVWR-DSDQ¶V:DVWH0DQDJHPHQWLaw expected to increase demand for greater manifest datatransparency, DIC resolved to introduce an industrial waste
PDQDJHPHQWV\VWHPWKDWZRXOGIDFLOLWDWHWKHHI¿FLHQWFROOHFWLRQ
of data while also ensuring legal and regulatory compliance.
7KH*URXSFXUUHQWO\XVHVWKHV\VWHPDWVLWHVLQ-DSDQDQG
intends to gradually expand deployment in the years ahead.

Comprehensive Industrial Waste Management System

DIC Group (Japan)

Groupwide management ofwaste by typeManagement in accordancewith specific rules

System provider

DIC Group in Japan
Generators（JWnet）
Disposers

Corporate headquarters
Substances of value

Sites

Industrial waste

General waste

Sites

Organization-wide
management of information
Management of paper manifests and e-manifests

Management of permits and contracts

VOICE We are working to further expand adoption of the comprehensive industrial waste management system.
$VDVLWH5HVSRQVLEOH&DUHRIILFHU,RYHUVDZDGRSWLRQRI*(1(6<6(&2DWWKHSODQWZKHUH,ZRUN:HZHUHWKHIURQWUXQQHUVRRXU
experience helped identify issues ahead of installation Groupwide, making it possible to customize the system to suit Group requirements. I
was subsequently transferred to the Responsible Care Department, where I got to see the process from the opposite perspective as part of
WKHWHDPLQFKDUJHRISODQWVDFURVV-DSDQ7KHDGYDQWDJHRIWKLVV\VWHPLVWKDWLQDGGLWLRQPDQDJLQJHPDQLIHVWVLWGRHVWKLQJVOLNHWUDFN
expiration dates of permits for transporters and intermediate processors, which both reduces labor requirements and ensures compliance. I
look forward to helping make necessary tweaks to facilitate even more effective use in the future.

Safety and Environment Group, Responsible Care Department

Emi Wakabayashi| Initiatives by the DIC Group Overseas
In addition to ensuring the disposal of industrial waste in a manner that complies with national and regional legal and regulatory requirements, the DIC
Group’s overseas production facilities work to minimize industrial waste through the voluntary recycling and reuse of materials.
,Q¿VFDO\HDU',&*URXSFRPSDQLHVLQWKH$PHULFDVDQG(XURSH*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQLQWURGXFHGQHZZDVWHWUHDWPHQW
facilities and promoted the horizontal deployment of best practices, including those aimed at improving production processes, with the aim of achieving
reductions in industrial waste generated that exceeded nationally and regionally mandated levels. Nonetheless, the total volume of industrial waste generated
E\',&*URXSSURGXFWLRQIDFLOLWLHVRYHUVHDVURVH/RRNLQJDKHDGUHJLRQDOKHDGTXDUWHUVLQWKHVHDUHDVZLOOIRFXVRQIXUWKHUUHLQIRUFLQJFRPSOLDQFH
ZLWKORFDOODZVDQGUHJXODWLRQVZKLOHDWWKHVDPHWLPHFRRSHUDWLQJZLWK',&¶V5HVSRQVLEOH&DUHDQG3URGXFWLRQ0DQDJHPHQWGHSDUWPHQWVWRDQDO\]HWKHUHDVRQVIRUWKLVLQFUHDVHZLWKWKHDLPRIFXUELQJWKHJHQHUDWLRQRILQGXVWULDOZDVWHDQGUHGXFLQJWKHYROXPHRILQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OODIC Report 2019

97

ESH

| Industrial Waste Discharged by the Global DIC Group in Fiscal Year 2018
7KHGH¿QLWLRQRI³LQGXVWULDOZDVWH´DQGWKHPHWKRGVXVHGWRGLVSRVHRIVXFKZDVWHYDU\LQGLIIHUHQWFRXQWULHVDQGUHJLRQVLQFOXGLQJZKHWKHUWKHWHUP
encompasses toxic and nontoxic substances, and hazardous and nonhazardous substances. The DIC Group appropriately manages and processes
industrial waste based on degree of danger in accordance with the laws of the countries and regions in which its sites are located.
Volume generated(Metric tonnes)

Volume generated byproduction facilities(Metric tonnes)

Volume recycled(Metric tonnes)

Waste heat recovered(Metric tonnes)

Japan

4.621

4,621

2,493

1,901

223

4

Overseas38,801

32,561

20,315

3,538

11,362

3,586

Japan

40,36927,622

18,831

18,5702,769

199

Overseas35,182

34,293

8,541

435

4,816

21,390Japan

44,99032,243

21,324

20,471

2,992

204

Overseas

73,984

66,85428,856

3,974

16,17824,976

118,973

99,09750,18024,444

19,16925,180

Toxic

Nontoxic

Aggregate

Total

Waste heat notrecovered(Metric tonnes)

Volume disposedof as landfill(Metric tonnes)| Environmental Impact of the DIC Group’s Operating Activities

Total energy consumption(crude oil equivalent)

4,255,000GJOUTPUTDIC Group(Japan)INPUT

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7KHFKDUWEHORZLVDFRPSUHKHQVLYHLOOXVWUDWLRQRIWKHHQYLURQPHQWDOLPSDFWRIWKH',&*URXS¶VGRPHVWLFRSHUDWLQJDFWLYLWLHVLQ¿VFDO\HDU7KHFKDUWVKRZVHQYLURQPHQWDOLPSDFWIRUWZRLQSXWLWHPV WRWDOHQHUJ\FRQVXPSWLRQDQGWRWDOZDWHUFRQVXPSWLRQ DQGVL[RXWSXWLWHPV HPLVVLRQVRIFKHPLFDOVXEVWDQFHV LQFOXGLQJWKRVHGHVLJQDWHGXQGHUWKH3575  DQGRQHVXEVWDQFHJURXS , emissions of COHPLVVLRQVRI12[HPLVVLRQVRI62[&2'LQZDVWHZDWHUDQGLQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OO

*Production
volume-1.4

924,000
metric tonnes

Emissions into the air

366 -1.3% 12.0

1,046,000
metric tonnes（+4.0％）

Wastewater discharged

29,694,000%
from fiscal year 2017m

204

+38.0 %
from fiscal year 2016

Soil-related emissions oftargeted substances(551 substances andmetricone substance group)
tonnes+12.0

0

CO2 emissions

386,000 -1.1%

metric tonnes from fiscal year 2017

Industrial waste
disposed of as landfill

24,796 +12.3
metric tonnes

Wastewater
discharged

13,355,000m3

1.7 times

Emissions into soil

timesfrom fiscal year 2017

metrictonnesEmissions into the air

Total water
consumption

24,076,000 ㎥ 2.7

fiscalyear 2017-13.7% from

Industrial waste disposedof as landfill-4.3 %

3 from fiscal year 2017

Aquatic emissions of targeted substances(551 substances and%metricone substance group)
tonnes from fiscal year 201728

fiscalyear 2017+8.6 % fromEmissions into soil

COD inmetric +3.4 %wastewater 810 tonnes from fiscal year 2017

OUTPUT

INPUT

6,647,000 GJ -1.4

metrictonnesEmissions into waterfrom fiscal% year 2017

Total energy consumption(crude oil equivalent)

metrictonnesSOx emissions

metric tonnes from fiscal year 2017

31,022,000㎥

Production
volumemetric tonnes from fiscal year 2017

Atmospheric emissions of targeted substances(551 substances and one substance group)from fiscal% year 2017

Total water
consumption-4.0

NOx emissions

232,000 -5.1% 202* Renewable energy is not included in the above figure.

（+2.9％）DIC Group(Overseas)

CO2 emissions

the fiscal year 2017%from fiscal year 2017

7KH3575LVDVFKHPHLQ-DSDQIRUDVVHVVLQJDJJUHJDWLQJDQGGLVVHPLQDWLQJGDWDRQWKHVRXUFHVRIKD]DUGRXVFKHPLFDOVDPRXQWVUHOHDVHGLQWRWKHHQYLURQPHQWDQG
amounts transferred off-site from industrial establishments via waste products.
7KH³VXEVWDQFHVDQGRQHVXEVWDQFHJURXS´FRPSULVHVFKHPLFDOVXEVWDQFHVGHVLJQDWHGE\WKH3575DQGVXEVWDQFHVDQGRQHVXEVWDQFHJURXSWDUJHWHGIRUVWXG\E\WKH-&,$

DIC Report 2019

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Managing Water Resources
Basic Approach
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Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Goals for fiscal year 2018

Achievements in fiscal year 2018

Evaluation

Maintain a firm grasp of water
risks relevant to DIC Group
operations and ensure theeffective use of water resources.

・Further advance efforts to centralize data for
fresh water withdrawn, water used andwastewater discharged.
・Promote the conservation and effective useof water resources.

・The scope of data collection was expanded.
・Steps were taken to promote the conservation and effective use of water resources.

★★
★★

Goals for fiscal year 2019

・Further advance efforts to centralize data for
fresh water withdrawn, water used andwastewater discharged.
・Promote the conservation and effective useof water resources.

| Principal Initiatives in Fiscal Year 2018
8VDEOHIUHVKZDWHUDFFRXQWVIRURQO\DURXQGRIWKHSODQHW¶VWRWDOIUHVKZDWHUUHVRXUFHV$FFRUGLQJO\¿QGLQJHIIHFWLYHZD\VWRFRQVHUYHDQG
manage water resources is a crucial global challenge. The DIC Group withdraws fresh water (tap water and industrial water) for use in production
processes and air conditioning and for drinking, among others. The Group also discharges wastewater—after purifying it in accordance with internal
VWDQGDUGVWKDWH[FHHGRI¿FLDOVWDQGDUGVLQWKHFRXQWULHVDQGWHUULWRULHVZKHUHLWKDVRSHUDWLRQV²LQWRULYHUVDQGRWKHUIUHVKZDWHUERGLHV,Q-DSDQ
WKH&HQWUDO5HVHDUFK/DERUDWRULHVLQ&KLED3UHIHFWXUHUHFRYHUVSXUL¿HGZDVWHZDWHU JUD\ZDWHU DQGUHXVHVLWRQVLWHLQUHVHDUFKDVDUHVXOWRI
which it currently discharges no wastewater. The Group also promotes the recycling and reuse of water to reduce its impact on water resources.
,Q¿VFDO\HDUWKH*URXSFRQWLQXHGWRSURPRWHHIIRUWVWRLPSURYHSURGXFWLRQSURFHVVHVVKDUHLQIRUPDWLRQDQGFHQWUDOL]HGDWDRQIUHVKwater withdrawn, water used and wastewater discharged. Fresh water withdrawn by the global DIC Group in the period increased 33.4% from the
ILVFDO\HDUOHYHOWRP3, comprising withdrawals by the Group in-DSDQ LQFOXGLQJWKHSDUHQWFRPSDQ\ RIP3, down 4.0%, and by GroupFRPSDQLHVRYHUVHDVRIP3XS:DVWHZDWHUGLVFKDUJHGE\WKH
JOREDO',&*URXSLQ¿VFDO\HDUURVHWRP3.
   (IIHFWLYH IURP ILVFDO \HDU  WKH *URXS DGRSWHG WKH *5,¶V JXLGHOLQH  IRUcollecting data on water withdrawn and used its water risk assessment tool to
DQDO\]HLQLWLDOZDWHUULVNDWVLWHVZRUOGZLGHZKLFKDFFRXQWIRURILWVJOREDOSURGXFWLRQ:LWKWKHDLPRIHQKDQFLQJLWVDELOLW\WRPDQDJHZDWHUUHVRXUFHVWKH
*URXSDOVRFRPPHQFHGDUHYLHZRIWKHVWDWXVRIZDWHUUHF\FOLQJHIIRUWV/RRNLQJDKHDGWKH*URXSZLOOFRQWLQXHZRUNLQJWRHQKDQFHLQLWLDWLYHVGHVLJQHGWRKHOSSURWHFWDQGHQVXUHWKHHIIHFWLYHXVHRISUHFLRXVZDWHUUHVRXUFHV:DWHUULVNPDSIncluded in the GRI’s G4 Sustainability Reporting Guidelines

Siam Chemical Industry Promotes the Recycling of Wastewater
6LDP&KHPLFDO,QGXVWU\XVHVDSSUR[LPDWHO\P3RIZDWHUUHVRXUFHVSHUGD\ZLWKDURXQG P 3  XVHG LQ PDQXIDFWXULQJ DQG  DSSUR[LPDWHO\ P 3) discharged as
ZDVWHZDWHU8VLQJDZDWHUUHF\FOLQJIDFLOLW\WKHFRPSDQ\KDVHQGHDYRUHGWRWUHDWDQGUHXVH
WKLV ZDVWHZDWHU ,Q ILVFDO \HDU  WKH FRPSDQ\ LQVWDOOHG D FOHDQLQJ WRZHU FDSDEOH RI
UHF\FOLQJP3SHUKRXUDVDUHVXOWRIZKLFKLWFXUUHQWO\UHF\FOHV±P 3 of wastewater
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recycling of water resources.

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Scope of Reporting for the Withdrawal of Fresh Water andDischarge of Wastewater(IIHFWLYHIURPILVFDO\HDUWKH',&*URXSDGRSWHGDQHZIRUPDWWKDW
calls for gathering data on the withdrawal of fresh water by source and the
GLVFKDUJHRIZDVWHZDWHUE\GHVWLQDWLRQ:LWKWKLVFKDQJHWKH*URXSDOVREHJDQFDOFXODWLQJZDWHUUHF\FOHGEXWGLI¿FXOWLHVZLWKPHDVXUHPHQWDQGGDWDFROOHFWLRQ
SUHYHQWHGDFDOFXODWLRQRIWKHWRWDOYROXPH*RLQJIRUZDUGWKH*URXSZLOOWDNH
steps to ensure the accuracy of this calculation.

Fresh Water Withdrawn by the Global
DIC Group in Fiscal Year 2018

Wastewater Discharged by the Global
DIC Group in Fiscal Year 2018

55,098,000 ㎥

43,049,000 ㎥+33.4%+10.9%

IURP¿VFDO\HDU

Fresh water withdrawn (1,000 m3)

Wastewater discharged (1,000 m3)

DIC Group in Japan

Global DIC Group

Surface water

15,24819,790Groundwater

6,116

7,844

0

0

Wastewater generated byother organizations

2,178

3,335

Tap water/industrial water

7,458

24,057

22

72

Total

31,02255,098

Total in fiscal year 201732,32741,308

-4.0%

33.4%

Rainwater

OthersChange from previous fiscal year

IURP¿VFDO\HDU

DIC Group in Japan

Global DIC GroupRivers

18,871

21,139

Oceans

7,077

7,078

External treatment facilities

3,731

10,377

Below ground0

3

Third parties

0

0

14

4,451

29,69443,049Total in fiscal year 2017

31,02538,822

Change from previous fiscal year

-4.3%

10.9%

Others
Total

Soil and Groundwater Pollution Studies-DSDQ¶V:DWHU3ROOXWLRQ&RQWURO$FWZDVUHYLVHGLQWRWLJKWHQVWUXFWXUDOVWDQGDUGVJRYHUQLQJHTXLSPHQWLQVWDOOHGWRSUHYHQWJURXQGZDWHU
contamination by chemical substances. In addition to complying strictly with this Act and with the Soil Contamination Countermeasures Act,
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and safety risks.

T

PIC

Nantong DIC Color Invests in Sewerage Management and Status Report System
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7HFKQRORJLFDO 'HYHORSPHQW $UHD 1(7'$  LQ WKH 35& DQQRXQFHG VHZHUDJH
V\VWHPPDQDJHPHQWPHDVXUHVZLWKWKHDLPRUHQVXULQJLWVDELOLW\WRHIIHFWLYHO\VXSHUYLVHFRPSDQLHVRFFXS\LQJVLWHVLQ1(7'$ZLWKVXFKV\VWHPVDQGLQVWDOOHG
HOHFWULF JDWHV DW GUDLQDJH SLSH RSHQLQJV ,Q 1RYHPEHU  ',& *URXSFRPSDQ\1DQWRQJ',&&RORULQYHVWHGDSSUR[LPDWHO\5PELQDVHZHUDJH
management and status report system that stops the system automatically in real
WLPHLIH[FHVVLYHDPRXQWVRISROOXWDQWVDUHJHQHUDWHGDQGHIIHFWLYHO\FRQWUROVH[FHVVGLVFKDUJHIDFLOLWDWLQJWKHDGYDQFHGPDQDJHPHQWRILWVVHZHUDJHV\VWHPDIC Report 2019

100

ESH

Biodiversity
Basic Approach
The DIC Group works to grasp the impact of its operating activities on biodiversity and to use land and natural capital in asustainable manner.

| Preserving Biodiversity
Protecting Satoyama* Areas
The DIC Group recognizes the preservation of biodiversity as a critical challenge. As part of DIC Management School, the Group’s training module for senior management inJapan, in January 2011 a lecture was given by an outside expert on the relationship between corporate activities and biodiversity. The lecture was attended by 85 executives
from corporate headquarters, as well as from plants and Group companies across the country, and prompted the launch of a wide range of related initiatives. For example,
the same year brought the launch of an initiative designed to ensure an effective grasp of the relationship between the Group’s operating activities and biodiversity at allstages of its products’ life cycles, from R&D and the procurement of raw materials through to end-of-life
disposal or recycling. In April 2011, experts from the Chiba Biodiversity Center, a prefectural governmentorganization, observed the natural forest and gardens on the 30-hectare site in Sakura, Chiba Prefecture,occupied by the Central Research Laboratories and the Kawamura Memorial DIC Museum of Art, giving
DIC’s biodiversity management efforts high marks and offering advice for future initiatives.
From the beginning, DIC has used a closed system for circulating and reusing groundwater for the&HQWUDO5HVHDUFK/DERUDWRULHVDQGKLUHGDZDVWHSURFHVVLQJ¿UPWRHQVXUHQRZDVWHZDWHUHVFDSHGIURP
the site. The site’s satoyamaODQGVFDSHPDNHVLWDQLGHDOKRPHIRUWUHHDQGÀRZHUYDULHWLHVDV
well as for an abundance of other wildlife, including birds and insects. Loved by the local community, thesite has welcomed approximately 200,000 visitors annually since the opening of the Kawamura Memorial
The forest and gardens of the site occupied by the Central Research Laboratories
DIC Museum of Art in 1990.

and Kawamura Memorial DIC Museum of Art is always alive with seasonalÀRZHUVDQGIROLDJH

* SatoyamaLVD-DSDQHVHWHUPDSSOLHGWRWKHDUHDEHWZHHQPRXQWDLQIRRWKLOOVDQGDUDEOHÀDWODQG

Establishment of a Biodiversity Satellite
The lush greenery of the Central Research Laboratories boasts a diverse range of naturally growing trees, including cedar,sawtooth oak and Japanese chinquapin. To preserve the natural environment, visitors to the site are prohibited from collecting
plants and wildlife and are instead encouraged to enjoy the pristine natural scenery as is. In cooperation with the Chiba
Biodiversity Center, the Kawamura Memorial DIC Museum of Art established a biodiversity satellite, a special display area ina small rest cabin on the site. Designed with the aim of fostering greater understanding of the importance of biodiversity, thesatellite features permanent exhibits, including information panels and other materials related to biodiversity prepared by theorganization, as well as introduces rare species native to Chiba and provides information on prefectural biodiversity initiatives.
Biodiversity satellite',&¶V6DLWDPD3ODQW)RFXVHVRQ%HLQJD+RPHIRU)LUHÀLHV
In addition to being a facility where employees can realize their full potential, DIC’s Saitama Plant, which manufacturers LCs, water-based inks, adhesive tapes and
PDJQHWLFWDSHVDPRQJRWKHUVHQGHDYRUVWREHDKRPHIRU¿UHÀLHVDQGDVVXFKWRFRH[LVWLQKDUPRQ\ZLWKWKHORFDOHQYLURQPHQW$VD¿UVWVWHSWRDFKLHYLQJWKLVJRDO
an ecosystem survey was conducted at the facility from April through October 2018. With the aim of improving the site’s detention basin area of the site, from late May
through June Saitama-Ken Environmental Analysis & Research Association and iinet Saitama, an NPO focused on biodiversity, conducted a preliminary survey of
SODQWVELUGVDTXDWLFOLIHDQGPDPPDOVLQKDELWLQJWKHVLWH¶VGHWHQWLRQEDVLQDUHD%DVHGRQWKH¿QGLQJVRIWKHVXUYH\WKHSODQWZLOOSUHSDUHDPDSRIOLYLQJFUHDWXUHVRQ
the site, transform the detention basin into a biotope and implement other initiatives that will ensure the site remains a place of recreation and relaxation for employees.

Survey of detention basin and oil separator

Installing an sensor camera

DIC Report 2019

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Safety in Logistics
The DIC Group works with logistics partners to minimize risks, including by supplying information needed for the shipping/transport of its products.

Responsible Logistics
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Goals for fiscal year 2018

Achievements in fiscal year 2018

• Energy consumption per unit of production
attributable to logistics declined 1.0%.
• CO2 emissions attributable to logistics
declined 10.0%.

Reduce CO2 emissions attributable tologistics by 1.0% by promoting modal
shift and improving transport efficiency.

Reduce CO2 emissions attributable tologistics (Scope 3).

Evaluation★★
★★

Goals for fiscal year 2019
• Reduce CO2 emissions attributable tologistics by 1.0% by promoting modal
shift and improving transport efficiency.
• Increase the volume of products
transported for which modal shift isused—crucial to achieving the above
1.0% annual reduction—by 10.0%.

| Basic Policy and Framework for Promoting Initiatives
DIC’s commitment to promoting Responsible Care encompasses initiatives aimed at reducing CO2 emissions attributable to the transport of its products.
7KH',&*URXS¶VORJLVWLFVFRQ¿JXUDWLRQ²FRPSRQHQWVRIZKLFKLQFOXGHWUDQVSRUWEHWZHHQSURGXFWLRQIDFLOLWLHVWKHWUDQVSRUWRISURGXFWVWRFXVWRPHUVDQG
LQWHUQDWLRQDOORJLVWLFV²SUHYLRXVO\FHQWHUHGRQDGHGLFDWHGVXEVLGLDU\HVWDEOLVKHGLQWKDWRSHUDWHGXQGHUWKHGLUHFWVXSHUYLVLRQRI',&,QDELGWRUDWLRQDOL]HDQGLQFUHDVHWKHHI¿FLHQF\RIORJLVWLFVLQ',&WUDQVIHUUHGRZQHUVKLSRIWKHVXEVLGLDU\WRDSDUWQHU¿UPDQGEHJDQWRRXWVRXUFHLWVORJLVWLFV
6LQFHWKHQWKH*URXSKDVZRUNHGFORVHO\ZLWKWKLVDQGRWKHUSDUWQHU¿UPVWRLPSURYHWKHVDIHW\RIDQGUHGXFH&22 emissions attributable to logistics.
:LWKWKHDLPRIEHWWHUUHVSRQGLQJWRVRFLDOLPSHUDWLYHVDVVRFLDWHGZLWKWKHWUDQVSRUWRIFKHPLFDOVRYHUWKHPHGLXPWRORQJWHUPLQ-DQXDU\',&
FRPELQHGWKHORJLVWLFVFRPSRQHQWVRILWVYDULRXVGHSDUWPHQWVWRFUHDWHDQLQGHSHQGHQW/RJLVWLFV'HSDUWPHQW$VDFRQVLJQRUWKHQHZGHSDUWPHQWZKLFKFRPSULVHVWKUHHVHFWLRQV²GRPHVWLFSODQQLQJRYHUVHDVSODQQLQJDQGWKHJOREDOWUDGLQJJURXS²LVFKDUJHGZLWKIRUPXODWLQJORJLVWLFVSROLFLHVDQGSURPRWLQJHIIRUWVWRHQKDQFHHI¿FLHQF\DVZHOODVZLWKFRRUGLQDWLQJZLWKORJLVWLFVSDUWQHUVWKDWLVWKLUGSDUW\ORJLVWLFV 3/ ¿UPVSURYLGLQJFRPSOHWHRXWVRXUFHGORJLVWLFVVHUYLFHVWRIXUWKHUHQKDQFHVDIHW\DQGUHGXFHHQYLURQPHQWDOLPSDFW
3/VDUH¿UPVWKDWSURYLGHSDUWLDORUFRPSOHWHRXWVRXUFHGORJLVWLFVVHUYLFHV

DIC’s Logistics ConÀguration
DIC’s Logistics
Department

Overseas
Group companies
SupporteﬀortsRegular safety
and environment
meetings(Policy/initiatives/
discussions)Conﬁrmation of
execution

Ɣ Loading and unloadingƔ Transport between production facilities
Ɣ Delivery of products(Ɣ Transport of purchased materials)
Others࡛ Domestic planning࡛ Overseas planning࡛ Global trading group(Exports/imports)

Product divisions

Principal DIC production facilities(Health and safety committees)

Logistics firms

DIC Report 2019

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| Reducing Greenhouse Gases Attributable to Logistics
7KHYROXPHRISURGXFWVWUDQVSRUWHGE\WKH',&*URXSLQ-DSDQLQ¿VFDO\HDUGHFOLQHGDQGHQHUJ\FRQVXPSWLRQDQG&22 emissions attributable
WRORJLVWLFVGHFUHDVHGDQGUHVSHFWLYHO\(QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQDWWULEXWDEOHWRWKHWUDQVSRUWRISURGXFWVLPSURYHG
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appointed for each country/territory in the region with the goal of ensuring efforts to strengthen logistics frameworks that take into account local businessFXVWRPV,Q¿VFDO\HDUWKH/RJLVWLFV'HSDUWPHQWWKH',&$VLD3DFL¿FORJLVWLFVPDQDJHUDQGFRXQWU\OHDGHUVZLOOFROODERUDWHWREROVWHUWKHHI¿FLHQF\RIUHJLRQDOORJLVWLFVIRFXVLQJSDUWLFXODUO\RQ,QGLDDQG$XVWUDOLD

CO2 Emissions and Energy Consumption per
Unit of Production Attributable to Logistics(GJ/10,000 tonne km)(%)(Metric tonnes)

30,00030

25,00025

20,00020

CO2 emissions(Metric tonnes of CO2)

15,00015

Energy consumption(GJ/10,000 tonne km)

10,00010Modal shift rate (%)

5,000

5

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18 (FY)| Safety Management in Logistics
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each others’ meetings to exchange information and promote on-site safety improvement initiatives.
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Regular meeting with logistics partners<HOORZ&DUGVDUHSDUWRIDFWLYLWLHVUHFRPPHQGHGE\WKH-&,$7KHVHFDUGVFRQWDLQLQIRUPDWLRQDERXWWKHFRUUHFWDFWLRQVWRWDNHLIDQDFFLGHQWRFFXUV7KH\SURYLGHFRQWDFWGHWDLOVWRHQVXUHSURSHUUHVSRQVHVE\WUDQVSRUWDWLRQFRPSDQLHV¿UH¿JKWHUVDQGSROLFHRI¿FHUVLIDQDFFLGHQW
occurs during the transport of chemical substances. Transport personnel must carry these cards at all times.
<HOORZ&DUGFDUULHGE\WUDQVSRUWSHUVRQQHODIC Report 2019

103

ESH

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PIC

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Training in the proper use of forklifts to move tote tanks and registration system for qualiÀed forklift drivers introduced,Q¿VFDO\HDUDQLQDSSURSULDWHIRUNDQJOHRUVWRSSLQJVSHHGGXULQJWKHWUDQVSRUWRIWRWHWDQNVXVLQJIRUNOLIWVUHVXOWHGLQVL[DFFLGHQWVLQYROYLQJWDQNVGURSSLQJRUWRSSOLQJRYHUDW',&*URXSVLWHVLQ-DSDQ$JDLQVWWKLVEDFNGURSSURPSWHGE\DSURSRVDOE\ORJLVWLFVSDUWQHU+LWDFKL)LQHQH[W7UDQVSRUW6\VWHP&R/WGLQ-XQH',&LQWURGXFHGDSURJUDPWRWUDLQHPSOR\HHVLQWKHSURSHUXVHRIIRUNOLIWVIRUPRYLQJWRWHWDQNVDWVHYHQ
sites. Training involved recreating actual accidents that resulted in tote tanks being dropped from forklifts and
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fork angles and stopping speeds. DIC also took advantage of the training program to adopt new nonslip forkliftmats and to introduce a registration system for employees who have completed training with the aim of prohibiting
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involving the dropping or toppling over of tote tanks had been reported since the launch of training.

Recreating an accident involving a tote tank dropping or topplingover during training

VOICE We are taking various steps to ensure DIC remains a preferred shipper.
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greenhouse gas emissions attributable to the transport of our products.
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work with production facilities and logistics partners to identify and address new issues.
General Manager, Logistics Department

DIC Report 2019104

Kenichi Tsuruta

ESH

Ensuring the Safety of Chemical Substances
The DIC Group continues working to provide appropriate information to stakeholders to ensure the appropriate handling of its products over the entire life cycles.

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2018

Achievements in fiscal year 2018

Evaluation• Information was customized to accommodate
the needs of individual customers.
• The Wercs was deployed at a Group company
in India.

★★★

Respond to requirements relating
to chemical product information.

• Enhance functions of the comprehensive system
for managing information on chemical substances.
• Continue to expand deployment of theWercs at overseas DIC Group companies.

• Promote compliance with the revised Act on
the Evaluation of Chemical Substances andRegulation of Their Manufacture, etc.
• Promote compliance with the ROK’s revised K-REACH.
• Complete registration of chemical substances
to which the EU’s REACH applies.

• Steps were taken to promote compliancewith the revised Act on the Evaluation ofChemical Substances and Regulation of
Their Manufacture, etc.
• Preparations for compliance with the ROK’s
revised K-REACH proceeded steadily.
• Registration of chemical substances to which
the EU’s REACH applies was completed inJune 2018.

Comply with regulations in Japanand overseas (e.g., Japan’s Act on
the Evaluation of Chemical Substances
and Regulation of Their Manufacture,etc. and Poisonous and Deleterious
Substances Control Act; the EU’s
REACH legislation and the U.S.’ TSCA.

★★

★★★
★★
★★★

Goals for fiscal year 2019

•Start creating a new global system that
integrates the functions of the comprehensive
system for managing information on chemical
substances for domestic products and the SDS
and label creation systems for export products.
•Deploy the Wercs at DIC Group companies inGreater China.

•Promote compliance with the revision of chemical
substance volume reporting requirements in Act on
the Evaluation of Chemical Substances andRegulation of Their Manufacture, etc.
•Complete advance registration of chemical substances towhich K-REACH applies.
•Promote compliance with Taiwan’s Toxic andChemical Substances of Concern Control Act (TCSCCA).

| Basic Policies and Framework for Implementation
As a comprehensive global chemicals manufacturer, DIC approaches compliance with laws and regulations and the effective managementof risks as essential to its survival. The Group works to maintain a solid grasp of laws and regulations in different countries and territories,
and of trends relevant thereto, thereby ensuring its ability to design products that comply with regulations governing the use of chemical
substances in products. The Group also strives to respond to requirements relating to the disclosure of information on chemical substances,
thereby ensuring the safety of chemicals and products.
In 2002, participants in the World Summit on Sustainable Development (WSSD) in Johannesburg, South Africa, agreed on a goal for the
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substances scheduled to be newly included in such agreements, as well as to actively provide information on chemical substances, with theaim of reducing risks to society.
As an expert in the management of chemical substances, DIC plays an active role in considering issues pertaining to chemical safety andregulations and developing responses through its participation in industry associations.

| Managing Chemical Substances
Ensuring the Swift Provision of Reliable SDSs
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understanding and the provision of SDSs.
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management of chemicals across its entire supply chain, DIC has sought to respond swiftly to this development, as well as to provide
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management of information on raw materials and chemicals, as well as automatically checks various laws and regulations—including the Act
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DIC Report 2019

105

ESH

Promoting the Global Deployment of the Wercs Label Creation System
In 2013, DIC began using the Wercs (a global SDS and label creation system developed with know-how from DIC) for products for export. As
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national and regional laws and regulations and is accessible in relevant local languages. In April 2014, DIC began using the Wercs to issue
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Framework for Promoting the Safety of Chemical Substances and Products

CIRIUS / The Wercs
Centralize management of
information on raw materials

Foster experts

Synergies

Centralize management ofchemical substance information

Licensing system

Raise employee expertise

Training
Labels can beprepared in

46 languages

Provide highly reliable SDSs and create GHS-compliant labels| Principal Initiatives in Fiscal Year 2018
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system with the aim of facilitating prompt responses to rapidly changing national and regional regulations regarding chemical substances.
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in individual countries and regions. Each working group works to further customize the systems with the aim of enhancing the quality of
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Guided by its new medium-term management plan, DIC111, DIC is exploring the creation of a new global chemical information management
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VOICE We built a research tool that matches product safety data and the latest chemical substance regulatory information.
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product development and chemical substance surveys that comply with chemical substance regulations.
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requirements, I am thrilled that the work I do is of use to many people. Going forward, we will leverage the know-how we have accumulated through
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Product Safety & Regulatory Group, Tokyo Plant

DIC Report 2019106

Chihiro Ishida

ESH

Risk Management Across the Supply Chain,QOLQHZLWKWKH',&*URXS8QLYHUVDO3XUFKDVLQJ3ROLF\',&IRUPXODWHGWKH',&*URXS*UHHQ3URFXUHPHQW*XLGHOLQHVZKLFKSURKLELWWKH
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Position on the Use of Animals in Testing,QOLQHZLWKWKH³5V´RIDQLPDOXVHLQUHVHDUFK ³5HSODFHPHQW5HGXFWLRQ5H¿QHPHQW´ ZKLFKDUHJXLGHOLQHVGHVLJQHGWRHQVXUHWKHPRUHHWKLFDOXVHRIDQLPDOVLQWHVWLQJWKH',&*URXSDFWLYHO\SURPRWHVVDIHHYDOXDWLRQXVLQJTXDQWLWDWLYHVWUXFWXUH±DFWLYLW\UHODWLRQVKLS 46$5 models, which do not employ animals, and alternatives to animal testing.

| Reducing Risks through the Global Provision of Information
Information on Raw Materials and Chemical Substances in Imported Products in JapanIn April 2013, DIC consolidated the management of information on the composition ofchemical substances in exported products and on chemical substance legislation invarious countries and regions, introducing the Wercs, a new system that automaticallycreates product SDSs in the language—and in compliance with the laws andregulations—of individual export destinations, creating a foundation for its global
information system and helping reduce risks for customers.
)RUSURGXFWVPDQXIDFWXUHGLQ-DSDQ',&XVHV&,5,86WRFHQWUDOL]HWKHPDQDJHPHQW
of information on raw materials and chemical substances. To facilitate the provision',&SURYLGHVLQIRUPDWLRQRQFKHPLFDOVXEVWDQFHVXVLQJ&,5,86LQ-DSDQRIUHOLDEOH6'6V&,5,86DXWRPDWLFDOO\FKHFNV)RUHLJQ([FKDQJHDQG)RUHLJQ7UDGH
and the Wercs overseas
Act–based secure trade control rules, as well as the Act on the Evaluation of Chemical
6XEVWDQFHVDQG5HJXODWLRQRI7KHLU0DQXIDFWXUHHWFWKH&KHPLFDO6XEVWDQFHV&RQWURO/DZWKH,QGXVWULDO6DIHW\DQG+HDOWK$FWDQGWKH3RLVRQRXVDQG
Deleterious Substances Control Act.
7KH:HUFVZKLFKLQFRUSRUDWHVNQRZKRZDFFXPXODWHGE\',&LQWKHFUHDWLRQDQGXVHRI&,5,86ZDVGHYHORSHGZLWKWKHDLPRIH[SHGLWLQJWKHSURYLVLRQ
of such information for products for export. The Wercs facilitates the translation of data into 46 different languages—including the languages of the 19
countries and territories to which DIC currently exports products—and the preparation of SDSs and labels in local languages that comply with laws andregulations in the Americas, Europe, Asia and elsewhere.
Since switching to the Wercs for creating SDSs and issuing labels for exported products, DIC has expanded the number of countries for which it can
SUHSDUHORFDOODQJXDJHOHJDOO\FRPSOLDQW6'6VDQGODEHOVWRLQFOXGHWKH52.(XURSHWKH8QLWHG6WDWHVWKH35&DQG7DLZDQ6LQFH$SULODOO6'6Vand labels for products for export have been prepared using the Wercs. DIC is also promoting deployment of the system to Group companies in Japan,
ZKLFKDUHXVLQJWKH:HUFVLQWDQGHPZLWK&,5,86WRHQVXUHWKHHIIHFWLYHPDQDJHPHQWRIFKHPLFDOVXEVWDQFHVDFURVVLWVGRPHVWLF*URXSVXSSO\FKDLQDIC Report 2019

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Global Deployment of the Wercs

Expanding Deployment of the Wercs at Overseas Group Companies
In fiscal year 2015, DIC began deploying the Wercs at Group
companies overseas. In fiscal year 2018, the Wercs was introduced at
an additional overseas company, bringing to 23 the number now using
the system. With the aim of promptly updating its labels to comply
with GHS hazard labeling standards in the event of revisions to laws
and regulations or the identification of new hazards, in fiscal year
2016 the Company set up an on-demand label printing system thatlinks the Wercs with its SAP system. In fiscal year 2019, the Company
will continue to deploy this system at companies that have alreadyintroduced the Wercs. Through these and other efforts, DIC aims toprevent human error and increase business efficiency, as well as tofacilitate globally consistent management based on a common system.

Fiscal year 2013

Japan (Four companies): DIC, DIC Graphics, DIC
Kitanihon Polymer and Seiko PMC

Fiscal year 2014—

Fiscal year 2015

Indonesia (Three companies)*
Malaysia (Two companies)*
Thailand (Two companies)*
PRC (Five companies)*
Taiwan (Two companies)*
Singapore (One company)

Fiscal year 2016

Taiwan (One company)*

Fiscal year 2017

Singapore (One company)
Philippines (One company)
Vietnam (One company)
Sri Lanka (One company)
Pakistan (One company)

Fiscal year 2018

India (One company)

Fiscal year 2019
(Scheduled)

PRC (One company)* Deployment is complete.

The DIC Group’s Comprehensive Global Chemical Information Systems

EuropeAsia

North America
Japan

AfricaCentral and SouthAmericaJapan (DIC Corporation)

CIRIUS

Asia–Pacific region

The Wercs

North and South America, Europe,
Africa and Russia (Sun Chemical),Australia (DIC)

ATRION

Oceania¦ Complying with Laws and Regulations
Ensuring Prompt Responses to Regulatory Changes Worldwide
The principal goal governing the management of chemical substances worldwide is that implied in the agreement, reached at the WSSD in 2002, to ensure,by 2020, that chemicals are used and produced in ways that lead to the minimization of significant adverse effect. Recent years have seen the European
Union enact Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH)* legislation, and the ROK, the PRC and Taiwan introduce
legislation aimed at strengthening chemical substances risk management. As well, countries in Southeast Asia have deployed the GHS.
DIC collects the latest information on chemical substances in overseas markets through international consultants, Group companies and experts, news
wire services and chemicals industry associations to ensure that it can respond swiftly and effectively to revisions in laws as well as play an important rolein the ensuring legal and regulatory compliance as a member of industry organizations in Japan. In 2009, the Companies began using CIRIUS to manage
chemical substance information for products manufactured in Japan. In fiscal year 2013, DIC switched to the Wercs for creating SDSs and issuing labels forexisting exported products, accelerating its ability to provide information to customers.
In fiscal years 2016 and 2017, steps were taken across Asia to reinforce the management of chemical substances. Of particular note, the PRC announced
a new assessment agency as part of its system for registering hazardous chemicals, while the ROK dramatically revised K–REACH, while Thailand andVietnam proceeded with preparations to introduce a new system for registering chemical substances.
* Under REACH, businesses bear full responsibility for evaluating the safety of chemical substances they produce and/or use, with no distinction made between “existing” and“new” substances. REACH also prohibits the use of specified chemical substances that pose unacceptable risks to human health.

DIC Report 2019

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| Principal Initiatives in Fiscal Year 2018
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into force. Based on a review of regulations on chemical substances with low production volumes in the early stages ofdevelopment, the revision shifts the focus of regulations on production volume away from assessed hazards (hazard
assessment) and toward risk when released into the environment (risk assessment).
In advance of this revision, DIC promoted steady efforts to ensure preparedness, including collecting and analyzing
relevant information, as well as extending information to and conducting seminars for customers and Group companies.
As a member of JCIA and the Japan Dyestuff and Industrial Chemicals Association (JDICA), DIC chairs a working groupcharged with formulating effective responses to the new system of exceptions for low production volume substances.
Employees in charge play a leading role, working with government authorities to ensure that member companies areprepared and able to implement measures without delay.

participate in industry association activities and were involved in the revision
VOICE Weof Japan’s chemical substance law.
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RI&KHPLFDO6XEVWDQFHVDQG5HJXODWLRQRI7KHLU0DQXIDFWXUHHWF7KURXJKRXWWKLVSURFHVVZHVWUXJJOHGWRFRSHZLWKGLIIHUHQFHVRIRSLQLRQDULVLQJIURPWKHGLYHUVHSHUVSHFWLYHVRISHUWLQHQWPLQLVWULHVLQFOXGLQJWKH0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\ 0(7, 7KHVLWXDWLRQZDVVLPLODUZLWKLQWKH-&,$ZLWKWKHYLHZVRILQGLYLGXDOVdiverging depending on the company they represent, so it took a lot of time and effort to get everyone on the same page regarding revisions.
Efforts to meet the WSSD goal for chemical substance management will conclude in 2020. Nonetheless, initiatives aimed achieving the SDGs will continue until 2030
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never lose sight of the need to act in a responsible manner to ensure that the DIC Group can continue to play a central role in the JCIA in the years ahead.
Group Manager, Chemical Management Group, Responsible Care Department

Shinobu Yamaguchi| Groupwide Efforts to Create a Stronger Compliance Framework
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(review of existing chemical substances on the TSCA list). DIC and Sun Chemical completed compliance with the reporting requirements imposed by this reset in-DQXDU\',&DOVRFRPSOHWHGUHJLVWUDWLRQRIHLJKWH[LVWLQJFKHPLFDOVXEVWDQFHVWRZKLFKWKH(8¶V5($&+OHJLVODWLRQDSSOLHVIRUZKLFKWKHUHJLVWUDWLRQGHDGOLQH
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LGHQWL¿FDWLRQRILVVXHVDQGWKHVKDULQJRILQIRUPDWLRQ
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substances produced in or imported into the United States.

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FRUSRUDWHKHDGTXDUWHUV7RN\R| Principal Initiatives in Fiscal Year 2018
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suppliers.
,Q-XQH',&FRPSOHWHGWKHUHJLVWUDWLRQRIH[LVWLQJFKHPLFDOVXEVWDQFHVXQGHUWKH(8¶V5($&+OHJLVODWLRQ7KH&RPSDQ\ZLOOFRQWLQXHWRUHVSRQGDVQHFHVVDU\E\UHJLVWHULQJQHZVXEVWDQFHVDQGUHUHJLVWHULQJH[LVWLQJVXEVWDQFHV XSGDWLQJLQIRUPDWLRQ WRHQVXUH5($&+FRPSOLDQFH,QDGGLWLRQWKH&RPSDQ\ZLOOFDSLWDOL]HRQLWVJOREDOQHWZRUN
to respond swiftly to changes in Southeast Asia, where the introduction of new regulations is proceeding at a rapid pace, maintaining a close eye on regional trends. Sun Chemical
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comply with laws and regulations in these regions, as well as to produce SDSs and labels.

DIC Report 2019

109

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attended the 2018 Chemical Regulatory Compliance Meeting and related training,
VOICE Iwhichwere held in November.
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also presented and discussed during the meeting.
:HDOVROHDUQHGDERXWKRZWRDFFHVVWR[LFLW\GDWD*+6FODVVL¿FDWLRQDQGLQYHQWRU\VWDWXVXVLQJWKH/2/,GDWDEDVHDVHDUFKWRROIRULQIRUPDWLRQFRQWDLQHGLQWKH
:HUFV7KLVZLOOKHOSXVWREHWWHUH[SODLQ6'6KD]DUGSLFWRJUDPVDQGRWKHULQIRUPDWLRQLVVXHGE\WKH:HUFVLQUHVSRQVHWRUHTXHVWVIURPFXVWRPHUVRU(6+LQVSHFWRUV,QDGGLWLRQWKHPHHWLQJLQWURGXFHGWKH*OREDO&KHPLFDO,QIRUPDWLRQ0DQDJHPHQW,QQRYDWLRQ3URMHFWWKHREMHFWLYHRIZKLFKLVWRKDUPRQL]HUDZPDWHULDOVLQIRUPDWLRQ
Regional Technical Manager, DIC Asia Paciﬁc Pte Ltd

Seah Thiam Leng

| Training in Chemical Substance Management
Specialized Training Under DIC’s Licensing System
As a comprehensive global chemicals manufacturer, DIC recognizes legal and regulatory compliance as central to risk management and
HQGHDYRUVWRLPSURYHHPSOR\HHV¶DZDUHQHVVDQGNQRZOHGJHRIFKHPLFDOVXEVWDQFHUHJXODWLRQVLQ-DSDQDQGRYHUVHDVE\KROGLQJZRUNVKRSVand maintaining a proprietary internal licensing system. Efforts include providing specialized training for individuals in Japan involved inexporting chemical substances in line with the Foreign Exchange and Foreign Trade Act and for individuals involved in importing chemical
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individuals held import licenses.

Export Licenses
Class A licenses

1,509
Class B licenses

Import Licenses
Advanced course
licenses

95

318

175
Training in Use of the Wercs at Overseas Group Companies:LWKWKHIXOOÀHGJHGGHSOR\PHQWRIWKH:HUFVLQ¿VFDO\HDUOHJDODQGUHJXODWRU\RI¿FHUVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQKDYHSURYLGHGWUDLQLQJLQWKHXVHRIWKHV\VWHPWDLORUHGWRORFDOODZVDQGUHJXODWLRQV7UDLQLQJVHPLQDUVJREH\RQGH[SODLQLQJWKHV\VWHP¶V
operations and advantages to ensure participating employees understand the importance of legal and regulatory compliance. In responseWRDUHTXHVWIURP*URXSFRPSDQLHVLQWKHVHUHJLRQVLQILVFDO\HDUUHJXODWRU\RIILFHUVYLVLWHG-DSDQWRUHFHLYHDGYDQFHGWUDLQLQJIURPPXOWLSOHGRPHVWLFOHJDODQGUHJXODWRU\RI¿FHUV9LVLWLQJRI¿FHUVUHJXODUO\XVHWKH:HUFVWRDPDVVDQGPDQDJHOHJDODQGUHJXODWRU\information, but the increasingly complex and sophisticated nature of their work has prompted many to seek request more advanced training
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will continue working to enhance knowledge and understanding by providing
VOICE Iongoingtraining.
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UHJXODWRU\RI¿FHUVDUHUHVSRQVLEOHIRUGLVVHPLQDWLQJFKHPLFDOVXEVWDQFHLQIRUPDWLRQDFURVVWKHVXSSO\FKDLQZKLFKZHGRE\PDNLQJHIIHFWLYHXVHRIRXUKD]DUGRXV
substances management system. To this end, we have established a regulatory committee that meets monthly to deliberate legal and regulatory issues and provides
6'6VWKDWFRPSO\ZLWKWKHODZVRIGLIIHUHQWFRXQWULHVDQGWHUULWRULHV7RLPSURYHWKHHI¿FLHQF\RIWKLVSURFHVVLQ6LDP&KHPLFDO,QGXVWU\LQWURGXFHGWKH:HUFV:LWKWKHDLPRIPD[LPL]LQJWKHFDSDELOLWLHVRIWKH:HUFVLQ,ZDVGLVSDWFKHGWR-DSDQIRUDGYDQFHGWUDLQLQJLQWKHXVHRIWKHV\VWHPDVZHOODVLQWKHXVHRIDQ
H[SRUWPDQDJHPHQWV\VWHPWKDWFRPSOLHVZLWK7KDLODQG¶VQHZ7UDGH&RQWURORQ:HDSRQVRI0DVV'HVWUXFWLRQ 7&:0' $FWZKLFKZLOOHQWHULQWRIRUFHLQ,ZLOO
capitalize on my newly acquired expertise to provide training for my colleagues at Siam Chemical Industry with the aim of enhancing knowledge and understanding.
Regulation Control, Siam Chemical Industry Co., Ltd.

DIC Report 2019110

Monticha Sudjai

ESH

Engaging with Society
DIC actively discloses information and publicizes its Responsible Care initiatives and endeavors to disseminate knowledge regarding ESH-related issues and to respond appropriately to public concerns.

| Information Disclosure and Engaging with Society
The DIC Group strives to increase the transparency of its activities through the active disclosure of information and at the same time
promotes dialogue with stakeholders by, among others, providing safety- and environment-related data through Group websites, the DIC
Report and other media, as well as by holding environmental presentations for local residents at production facilities.
The DIC Group also promotes a variety of efforts to deepen its engagement with society. In Japan, such efforts include preparing site
reports, inviting junior and senior high school students in for hands-on lab lessons, participating in community disaster drills and providing
assistance for local festivals and other local events. Overseas Group sites seek to advance dialogue and interaction with local communities
by participating in tree plantings and other activities aimed at helping prevent global warming and preserve biodiversity.

［ DIC株式会社

サイトレ ポ ート

埼玉工場 環境方針 ］

2017

DIC株式会社埼玉工場は、社会の一員として、また化学物質を製造・販売する企業として、安全・環境・健康の確保が経営の基盤であることを認識し、このことを事業活動のすべてに徹底し、「持続可能な開発」の原則のもとに生物多様性を含め地球環境等に調和した技術・製品を提供し、もって社会の発展に貢献する。

埼 玉 工 場2017年度 埼玉工場長 サステナビリティ活動計画
１. 生産・研究活動において安全・衛生・健康を確保する。
２. 会社収益の向上・体質強化に貢献する。
３. 価値ある 新製品を開発、及び品質を提供する。
４. 生産・研究活動を通じ、社会からの要請や循環型社会形成に貢献する。
５. 人格主義に基づいた人材育成と組織力の向上。

DIC株式会社 埼玉工場
工場長 入間川伸一

埼玉工場〒362-8577
埼玉県北足立郡伊奈町大字小室4472-1
TEL 048（722）8211
FAX 048（722）6087
http://www.dic-global.com/

Environmental presentation for the local community (Saitama Plant)

Site report (Saitama Plant)

Community event (bon odori) participation (Tokyo Plant)

DIC Report 2019111

Quality
Enhancing Product Quality and Customer Satisfaction
Goals and Achievements of Major Initiatives
Objective of initiatives

Secure product quality.

Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work

Goals for fiscal year 2018

Achievements in fiscal year 2018

Evaluation

Goals for fiscal year 2019

Reinforce the quality assurance framework by, among others, modifying thecorporate culture and improving employee ethics, thereby making it possible toprevent quality issues from arising.

A new system was created to collate andanalyze information received regarding quality
issues (complaints and criticisms) and to sharesuch information efficiently across the Group.
This system was deployed with the aim ofpreventing the recurrence of such problems.

★★

Reinforce the quality assurance framework by, among others, modifying thecorporate culture and improving employee
ethics, thereby making it possible toprevent quality issues from arising.

Ensure a level of quality that fulfills the DIC
Group’s corporate social responsibility. Collectand organize information on raw materials
pertinent to safety, compliance with laws andregulations, and environmental protection andprovide appropriate product information.

Efforts to provide appropriate productinformation proceeded apace, including
through the use of CIRIUS to manage
information on raw materials and provide
appropriate product information.

★★

Ensure a level of quality that fulfills the DIC
Group’s corporate social responsibility. Collectand organize information on raw materials
pertinent to safety, compliance with laws andregulations, and environmental protection andprovide appropriate product information.

Basic Approach
Along with its Environment, Safety and Health Policy, the DIC Group views the improvement of product quality as a theme that is essential to upholding a sound operating foundation.
Accordingly, the Group seeks to ensure every employee shares the sentiment conveyed in its Quality Policy and works continuously to enhance quality and ensure customer satisfaction.

DIC’s Quality Policy³&RQWULEXWHWRWKHSURVSHULW\RIFXVWRPHUVDQGVRFLHW\E\FRQVLVWHQWO\SURYLGLQJUHOLDEOHSURGXFWV´ 8SGDWHGLQ0D\

| Framework for Implementation
To better leverage its agility and comprehensive capabilities, DIC has established a matrix-like quality
management configuration that positions product divisions on the vertical axis and the Technical
0DQDJHPHQW8QLWDQG3URGXFWLRQ0DQDJHPHQW8QLWRQWKHKRUL]RQWDOD[LV,Q¿VFDO\HDU',&
UHYDPSHGLWVTXDOLW\DVVXUDQFHFRQ¿JXUDWLRQZLWKWKHDLPRIEXLOGLQJDVWURQJHUFRQVHQVXVEHWZHHQ
top management and employees on the front lines, establishing the Quality Assurance Department
and product division quality assurance groups. This framework enables swift and effective responses
to quality issues.
The Quality Assurance Department is responsible for product quality across the entire DIC Group,
while product division quality assurance groups oversee product-specific quality management. In
addition to facilitating prompt and appropriate quality management, this division of Groupwide andSURGXFWVSHFL¿FTXDOLW\PDQDJHPHQWHQFRXUDJHVFORVHFRPPXQLFDWLRQDPRQJGHSDUWPHQWVThe Quality Assurance Department implements regular product quality audits of DIC Group
companies in Japan to ensure that quality management is functioning effectively, as well as to lift
product quality levels. Overseas, DIC Group companies work with the Quality Assurance Department
and the product division quality assurance groups to promote a variety of efforts aimed at achieving
IXUWKHULPSURYHPHQWV,QILVFDO\HDUSURGXFWTXDOLW\DXGLWVZHUHFRQGXFWHGDWVL[RYHUVHDVGroup companies.
,Q¿VFDO\HDUWKH4XDOLW\$VVXUDQFH'HSDUWPHQWDQGWKHSURGXFWGLYLVLRQTXDOLW\DVVXUDQFH
groups began taking steps toward the creation of a new quality assurance system, including promoting
the automation and mechanization of testing and inspection procedures.

DIC Report 2019112

Enhancequality

Product
divisions
QMS

Ensurecustomersatisfaction

Production facilities certified under ISO 9001

Production Management Unit
andTechnical Management Unit

Quality

1

Initiatives Aimed at Increasing Customer Satisfaction

DIC’s system for ensuring
customer satisfaction

Aspects visible
to customers

To ensure its ability to provide high-quality products that customers feel secure using, DIC promotes a variety of quality improvement initiatives
during product planning, design and development, the procurement of raw materials, production and sales, giving consideration to the need for
effective product stewardship. Relevant product division quality assurance groups participate in design reviews from the initial stages of development,
conducting rigorous evaluations at each stage, with the goal of providing the products and services that customers and markets seek. After products
are sold, customer and market assessments are gathered and fed back to development departments to facilitate further quality improvements. In¿VFDO\HDU',&FRQGXFWHGTXDOLW\DXGLWVRIIRXUUDZPDWHULDOVVXSSOLHUV

Requests from customers/markets and society
Information from customer
Requirements

Output from DIC
Products

Sales
strategies
Planning
andproposalsMarketing

Qualityassurance
Design anddevelopment
Production

Contents/composition
Container/mode of packing
Consideration of environment
Workability and conveniencein handling
Disposal after use
Safety level of raw materials
Conformity to laws and regulations
Productivity and capacity
Safety and stability of processes
Costs/stable supply

SDSs
Technical
documents

Labeling
Packaging
Sample for
evaluation test

Design review
Validation
Control of changes

Product evaluation
Trial production
Mass trial production

Contract /delivery
specifications
COAs (Certificates of analysis)
SDSs
Catalogs
Products

Production/quality
confirmation Products

DIC website
Customer
お客様 相consultation
談 情報
information
Technical service
Quality validation

Requests for improvement
Requests for cost reduction
Dealing with customer
information
Top management diagnosis/
internal audit
Market requirements
Self-regulation of industry

Business activities of DIC aimed at delivering high-quality products that are safe and reliable

Ensuring a Level of Quality that FulÀlls the DIC Group’s Corporate Social Responsibility
7RSURYLGHVDIHW\GDWDVKHHWV 6'6V EDVHGRQDSSURSULDWHXSWRGDWHSURGXFWLQIRUPDWLRQWKH4XDOLW\$VVXUDQFH'HSDUWPHQWFROODERUDWHVZLWKtechnical and purchasing departments to collect and organize information on raw materials pertinent to safety, compliance with laws and regulations,
DQGHQYLURQPHQWDOSURWHFWLRQ',&KDVHVWDEOLVKHG&,5,86 &KHPLFDO6XEVWDQFH,QIRUPDWLRQ&RPSUHKHQVLYH0DQDJHPHQW6\VWHP WRPDLQWDLQVXFKLQIRUPDWLRQZKLFKLWUHÀHFWVLQLWV6'6V
2

Efforts to Enhance Product Quality–Related Educational Initiatives

Committed to providing safe, secure products that satisfy its customers, DIC recognizes theimportance of ensuring that employees maintain a high awareness of quality, as well as aconstant commitment to achieving further quality improvements and upholding high quality
standards. To this end, the Company provides education regarding product quality to all',&*URXSHPSOR\HHVDWVSHFL¿FWLPHVLQFOXGLQJWKURXJKWUDLQLQJIRUQHZO\KLUHGDQGQHZO\promoted employees.
6LQFH¿VFDO\HDU',&KDVDOVRRIIHUHGWUDLQLQJOHGE\H[WHUQDOH[SHUWVLQWKH¿HOG
IRUHPSOR\HHVLQYROYHGLQTXDOLW\PDQDJHPHQW$SSUR[LPDWHO\LQGLYLGXDOVSDUWLFLSDWHLQ
VXFKWUDLQLQJDQQXDOO\IRUDWRWDORIWRGDWH6LQFH¿VFDO\HDUWKH&RPSDQ\KDV
held meetings for employees responsible for quality assurance on the front lines to revitalize
the efforts of employees and departments by facilitating the exchange of informationand opinions. Going forward, DIC will continue working to establish and promote further
awareness of product quality as essential to upholding a sound operating foundation.
3

Global Product Quality Initiatives

DIC Group companies with production capabilities in Japan, Greater China and the$VLD±3DFL¿FUHJLRQDUHZRUNLQJWRHDUQFHUWL¿FDWLRQXQGHU,62WKH,QWHUQDWLRQDOOrganization for Standardization’s benchmark for quality management systems, withKDYLQJDFKLHYHGWKLVJRDODVRIWKHHQGRI¿VFDO\HDUEDVHGRQZKLFKWKH\
are working to establishing product quality assurance frameworks. In the years ahead,
DIC will advance efforts to further reinforce quality frameworks to better suit productdivisions and Group companies.

DIC Report 2019

113

Percentage of DIC Group Companies with
Production Capabilities CertiÀed Under ISO 9001
DIC

100%

DIC Group Companies
in Japan and Overseas

93%Quality

4

Preventing the Recurrence of Quality Problems

The DIC Group has created a system to ensure that information received regarding quality
SUREOHPV FRPSODLQWVDQGFULWLFLVPV LVFROODWHGDQDO\]HGDQGVKDUHGHI¿FLHQWO\DFURVVWKH*URXS
thereby preventing the recurrence of such problems.
To discover the causes of quality problems, the Group employs “why-why analysis” (“naze-nazebunseki´ 8VLQJZK\ZK\DQDO\VLVLQDQHIIRUWWRHOLPLQDWHSURGXFWUHMHFWVDWWKHSURGXFWLRQVWDJH
LQ¿VFDO\HDUWKH+RNXULNX3ODQWDFKLHYHGDQUHGXFWLRQIURPWKH¿VFDOOHYHO',&
also applies why-why analysis in determining the cause of accidents, an approach that continues
to yield solid results.
Through meetings held to facilitate the exchange of information and opinions among individuals
responsible for quality assurance on the front lines, the Group also continues to promote bottomXSTXDOLW\LPSURYHPHQWLQLWLDWLYHVWKDWUHÀHFWIURQWOLQHSHUVSHFWLYHV',&DOVRSXEOLVKHVQuality
News, which provides useful information on quality management and ways to enhance work
quality. In addition to being published regularly on DIC’s portal site and distributed directly to
relevant parties, Quality News is used in employee training. In accordance with the Group’s risk
management policy, the DIC Group has established procedures for responding to serious qualityrelated issues, enabling it to respond effectively in emergency situations.

Change in the Number of Quality Problems
Change in the Number of Product Returns

Change in the Number of Complaints Received(%DVH\HDU)LVFDO\HDU
0
ー10(%DVH\HDU)LVFDO\HDU
（%）

-10

ー10

-32

ー20

（%）

-10
-27

ー20

-57

ー30

0

-56

-62

-59

-51

ー30

ー40

ー40

ー50

ー50

-46

-45

-37

-36

-37

14

15

16

17

18 （FY）

ー60
ー70
12

13

14

15

16

17

18 （FY）

12

13

Why-why analysis (naze-naze bunseki 

VOICE Quality doesn’t lie. Responsibility for quality lies with everyone involved in production.
The Performance Material Products Division offers high-performance synthetic resins to customers in a wide range of industries, including paints,
electronics materials, aerospace composites, automobiles, optics, construction and civil engineering. The key factor underpinning the businessfoundation of these diverse products is quality. It is crucial that all employees in departments involved in production processes recognize that
responsibility for quality lies with them. Quality assurance groups are responsible for keeping the promises we have made to customers in productdelivery specifications and delivering products that can be used safely and continuously.
Quality doesn’t lie. We continue to promote consistent quality assurance initiatives at DIC Group production sites in Japan and overseas with theaim of guaranteeing a level of quality that enables us to maintain and improve customer trust.
General Manager, Performance Materials Quality Assurance Group, Performance Material Products Division, DIC Corporation Miyuki Kawasaki

DIC Report 2019114

Human Resources Management

SDGs Goals 3, 4, 5, 8 and 10

Working to Enhance Job Satisfaction

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Foster and endorse the advancementof local staff overseas with the aim ofadvancing global management.

Encourage women in the workplacewith the aim of securing a diverse
labor force and supporting diverse
working styles.

Promote the hiring of individuals withdisabilities with the aim of securing adiverse labor force and supporting
diverse working styles.

Goals for fiscal year 2018

Achievements in fiscal year 2018

Evaluation

Goals for fiscal year 2019

• Formulate a human rights policy.
• Use human rights training to encourageawareness of the policy.
• Implement voluntary human rights inspections at Group companies in Japan andoverseas.

• A human rights policy was formulated andannounced.
• Human rights inquiries were conducted andsteps were taken to promote awareness at DIC
Group companies worldwide.
• Sun Chemical continued to participate in the
Responsible Mica Initiative.

★★

• Reinforce awareness of the human rights
policy.
• Use ESG human rights training to encourageawareness of the policy among executives andother pertinent individuals.
• Provide tailored guidance based on the resultsof voluntary human rights inspections.

Consider the creation of a global personnel
system that includes evaluation with the goalof ensuring rational and efficient humanresources management.

• A new Human Resources Strategy Department
was established.
• A trial of a new process for selecting the next
generation of management was launched.

★★★

Announce and begin implementing WING, a
new strategy designed to rally diverse humanresources as the source of DIC’s competitiveness as a global organization.

• Continue offering the GCD Program.
• Continue providing practical training aimed at
fostering global human resources.

• The G roup c ontinued to of fer the G CD
program.
• The Group continued to provide practicaltraining aimed at fostering global humanresources.

• Continue offering the GCD Program.
• Continue providing global human resources★★★
training aimed at fostering employees atmultiple levels.

Continue to advance efforts to, among
others, change mindsets, create a framework
and actively encourage the hiring of female
job candidates.

• A program to foster female leaders was implemented.
• A panel discussion was held with women in management positions at other companies as panelists.
• Telecommuting arrangements were introduced in
January 2018.
• DIC earned selection as a Nadeshiko Brand.

• Continue to implement the program to foster
female leaders.
• Use roundtable discussions to manage the★★★
progress of efforts to promote career opportunities for female employees.
• Introduce leave for employees to accompany
spouses overseas.

As of December 31, 2018, individuals withdisabilities accounted for 2.41% of DIC’s totallabor force.

Work with the Japanese government’s Hello Workpublic employment security offices, as well as
special needs schools and other organizations topromote the hiring of individuals with disabilities, tomaintain the employment rate for individuals withdisabilities at 2.4% of DIC’s total labor force.

Increase the number of employees withdisabilities to 2.2% of DIC’s total labor force.

★★★

Basic Approach to Human Resources Management
With the aim of being an organization that empowers all employees to reach their full potential, the DIC Group is committed to respecting human rights
and eliminating all forms of discrimination and to creating a work environment that embraces diversity. The Group also strives to support a healthy
work–life balance for each employee and create a work environment conducive to job satisfaction, as well as to foster local human resources inmarkets around the world, which it recognizes as essential to ensuring sustainable corporate growth under its current medium-term management plan.

| A New Strategy for a Stronger Management Infrastructure
In line with The DIC Way, which represents its fundamental management policy, the DIC Group has established a global human resources
PDQDJHPHQWIUDPHZRUNXQGHUZKLFK*URXSFRPSDQLHVLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQDUHRYHUVHHQE\',&ZKLOHWKRVHLQ
North America, Europe, Central and South America, and Africa are overseen by Sun Chemical of the United States. The Company’s DIC111
medium-term management plan, which was introduced in February 2019, sets forth a new strategy, dubbed WING, that is designed to rally
the Company’s diverse human resources as the source of its competitiveness as a global organization. WING centers on four core themes,summarized as “work style reform,” “HR infrastructure reform,” “next management selection” and “global talent development.”

DIC Report 2019115

Human Resources Management

WING: DIC111 Strategies for Human Resources Management

Work Style Reform

HR Infrastructure Reform

Reform work styles to capitalize on diversified individuality

Adopt a global human resources system and unify Group system■

Reform jobs with digital tools.

■

Consolidate employee qualification systems globally.

■

Reform working conditions by introducing a telecommuting system and flexible working hours.

■

Unify qualification standards and assessment formats for management-level employees.

■

Shift focus of evaluation from quantity to quality.

■

Develop IT system for global human resources platform.

■

Support employees who have childcare or nursing care responsibilities or suffer illness, etc.

Global Talent Development

Next Management Selection
Establish system to appoint the next management teamDevelop global human resources■

Clarify requirements for employees in key positions.

■■

Establish selection and monitoring processes for high-potential employees.

■■

Use talent review to optimize combination of positions and employees.

Define level of and set requirements for global human resources.
Systematize global human resources development programs(English-language ability, competency, work experience, etc.)

Basic Personnel Statistics (DIC)

Number of
employees

MaleFemaleTotal

Average age

Male
FemaleTotal

Averageyears ofemployment

Male
FemaleTotal

New
graduates
hired

Male
FemaleTotal

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

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

2,618
655
3,273
42.2
41.3
42.0
18.2
19.2
18.4
39
11
50

2,628
660
3,290
42.5
41.9
42.4
18.4
19.7
18.6
43
19
62

Retention rate
(after three
years)

Male
Female
Total

Separations(voluntary)(number ofindividuals)

Male
Female
Total

Separation rate(voluntary)

Male
FemaleTotal

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

(Fiscal year 2013 hires)(Fiscal year 2014 hires)(Fiscal year 2015 hires)

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

79.2%
100%
83.5%
35
11
46
1.3%
1.7%
1.4%

87.8%
81.0%
86.3%
55
15
70
2.1%
2.3%
2.1%

| Respect for Human Rights
The DIC Group actively supports global codes governing human rights*1, in line with which it is currently formulating the DIC Group Human Rights Policy, and promotes related
initiatives. The DIC Group Code of Business Conduct, which outlines standards that DIC Group employees are expected to observe, lays down provisions prohibiting humanrights violations and requiring respect for diversity, two philosophies that are the foundation of the Group’s corporate activities. DIC Group employees are obliged to understandand provide written pledges to abide by the Code. Domestic and overseas Group companies implement voluntary human rights and labor practices inspections as part ofRQJRLQJHIIRUWVWRSUHYHQWLVVXHVIURPDULVLQJDVVHVVWKHUHVXOWVRIWKHVHLQVSHFWLRQVDQGFRQ¿UPWKHDEVHQFHRIYLRODWLRQV
,Q¿VFDO\HDU',&EHFDPHDVLJQDWRU\WRWKH8QLWHG1DWLRQV*OREDO&RPSDFW 81*& SOHGJLQJLWVVXSSRUWIRUWKH7HQ3ULQFLSOHVRIWKH81*&ZKLFKLQFOXGHWHQHWV
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 thehuman resources management practices of all Group companies and prevent the occurrence of violations.
In response to the Modern Slavery Act 2015*2, DIC is reinforcing training regarding human rights due diligence*3FRJQL]DQWRIWKHLVVXHRIKXPDQWUDI¿FNLQJDQGWKHULVNVit poses to companies with operations in the United Kingdom. The Company also promotes awareness among DIC Group company executives and enhances corporate
headquarters’ inspection and monitoring structure as part of an ongoing effort to bolster Group management capabilities.
*1 The International Bill of Human Rights, comprising the Universal Declaration of Human Rights and the International Covenants on Human Rights (the International Covenant on Economic, Social and Cultural Rights and the International Covenant on Civil
and Political Rights); the International Labour Organization(ILD)’s Declaration on Fundamental Principles and Rights at Work; the United Nations’ Guiding Principles on Business and Human Rights; and the Ten Principles of the UNGC.
*2 8QGHUWKH0RGHUQ6ODYHU\$FWDQ$FWRIWKH3DUOLDPHQWRIWKH8QLWHG.LQJGRPFRPSDQLHVZLWKRSHUDWLRQVLQWKH8QLWHG.LQJGRPPXVWUHSRUWRQWKHH[LVWHQFHQRQH[LVWHQFHRIVODYHU\KXPDQWUDI¿FNLQJRURWKHUFULWLFDOYLRODWLRQVRI
KXPDQULJKWVLQWKHLUVXSSO\FKDLQVUHODWHGULVNVDQGVWHSVWKH\DUHWDNLQJWRDGGUHVVVXFKSUDFWLFHV³0RGHUQVODYHU\´HQFRPSDVVHVGHEWERQGDJHIRUFHGODERUDQGVHUYLWXGHKXPDQWUDI¿FNLQJDQGH[SORLWDWLRQ LQFOXGLQJVH[XDOH[SORLWDWLRQ
and forced organ donation).
*3 Human rights due diligence is an ongoing risk management process that a company needs to follow in order to identify, prevent, mitigate and account for how it addresses its adverse human rights impacts.

DIC Report 2019116

Human Resources Management| Initiatives in Fiscal Year 2018
$WRWDORI',&*URXSFRPSDQLHVLQ-DSDQDQGRYHUVHDVLPSOHPHQWYROXQWDU\KXPDQULJKWVDQGODERUSUDFWLFHVLQVSHFWLRQV,Q¿VFDO\HDU',&UH¿QHGWKHVFRSHRITXHVWLRQQDLUHVGLVWULEXWHGWRFRPSDQLHVIRUWKLVSXUSRVHDQGEHJDQSURPRWLQJHIIRUWVWRLQFUHDVHWKH
visibility of related issues at individual companies, providing direction and/or training at corporate headquarters where necessary. Having
FRPSOHWHGYHUL¿FDWLRQRIWKHUHVXOWVRILQVSHFWLRQVDWFRPSDQLHVLQ-DSDQLQ¿VFDO\HDU',&ZLOOJUDGXDOO\H[SDQGHIIRUWVWRDVFHUWDLQ
status, promote awareness and provide training at Group companies in key overseas markets.

| The DIC Group Human Rights Policy
As a member of society that recognizes the importance of respect for human rights and respects the basic human rights of all stakeholders, including
its customers, suppliers and employees, the DIC Group is currently formulating a human rights policy, a draft of which is provided below. Based on
this policy, DIC will work to increase the human rights awareness of its executives and employees and to conduct its business activities in a mannerthat shows respect for human rights.
１．Positioning

This policy, which is in accordance with global human rights codes, articulates DIC’s fundamental stance on respect for human rights.
２．Scope of application

This policy applies to all executives and employees of the DIC Group. The Company shall also encourage its business partners andsuppliers to adhere to this policy and cooperate with them to advance respect for human rights.
３．Responsibility to respect human rights

The Company shall strive to fulfill its responsibility to respect human rights by ensuring that its business activities do not result in
violations of the human rights of stakeholders, as well as by preventing human rights abuses in the course of its business. In the eventthat its business partners or suppliers cause adverse human rights impacts through their businesses, products and services, the&RPSDQ\²ZKLOHQRWGLUHFWO\FRPSOLFLW²VKDOOXVHLWVLQÀXHQFHWRHQFRXUDJHWKHUHVSRQVLEOHSDUWLHVWRFHDVHWKHSUDFWLFHVUHVSRQVLEOH
for such impacts.
４．Human rights due diligence

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shall employ on an ongoing basis to identify and address human rights risks.
５．Corrective/remedial actions

Should the Company cause adverse human rights impacts or should it become evident that it has been complicit in causing suchimpacts, the Company shall take appropriate corrective/remedial actions in response.
６．Compliance with applicable laws

The Company shall comply with applicable laws in the countries and territories in which it operates. The Company shall also respect
international human rights principles and work actively to promote these principles.
７．Disclosure and education/training

The Company shall periodically report publicly on the progress of initiatives implemented in line with this policy. To ensure theeffectiveness of this policy, the Company shall also provide appropriate training to its executives and employees.
８．Dialogue and discussion

The Company shall engage with stakeholders regarding initiatives implemented in line with this policy by creating opportunities for
dialogue and promoting discussion in good faith.
９．Identifying principal human rights challenges

7KH&RPSDQ\KDVVHSDUDWHO\LGHQWL¿HGSULQFLSDOKXPDQULJKWVFKDOOHQJHV,QOLQHZLWKWKLVSROLF\WKH&RPSDQ\VKDOOXVHGXHGLOLJHQFH
as appropriate. Recognizing this as an ongoing process, the Company shall also continue to revise and amend these challenges toUHÀHFWVRFLDOFKDQJHEXVLQHVVWUHQGVDQGRWKHUIDFWRUVDIC Report 2019117

Human Resources Management| Principal Human Rights Challenges Facing the DIC Group%DVHGRQNH\JOREDOVWDQGDUGVUHJDUGLQJKXPDQULJKWVWKH',&*URXSKDVLGHQWL¿HGWKHIROORZLQJDVWKHSULQFLSDOKXPDQULJKWVFKDOOHQJHVLWIDFHVDQG
promotes appropriate due diligence in accordance with its draft human rights policy. The Group will review these challenges on a regular basis, taking into
consideration factors such as social change and business trends.
（1）Eliminate discrimination

The DIC Group prohibits all types of discrimination, harassment and other practices that undermine the dignity of any individual.
Prevent
child labor and forced labor（2）
7KH',&*URXSSURKLELWVWKHXVHRIFKLOGODERUIRUFHGODERUVODYHODERUDQGODERUUHVXOWLQJIURPDQ\IRUPRIKXPDQWUDI¿FNLQJ
（3）Respect basic labor rights
The DIC Group respects basic labor rights, including freedom of association and employees’ rights to organize and to engage incollective bargaining.
（4）Address the issue of conÁict minerals
7KH',&*URXSSURKLELWVWKHXVHRIFRQÀLFWPLQHUDOV6KRXOGDQ\UDZPDWHULDOVSXUFKDVHGIURPWKLUGSDUW\VXSSOLHUVEHIRXQGWRFRQWDLQFRQÀLFWPLQHUDOVWKH*URXSZLOOUHVSRQGE\DPRQJRWKHUVLPPHGLDWHO\WHUPLQDWLQJWKHSURFXUHPHQWWKHUHRI| The DIC Group’s Human Rights Due Diligence System
The DIC Group has created a human rights due diligence system, which it employs on an ongoing basis.

１）Commit

２）Identify andevaluate impacts３）Implement corrective/remedial
measures, provide training andgauge effectiveness

Demonstrate the Group’s
human rights policy and views.

Identify and evaluate human rights risks in theGroup’s business and across its supply chain.

Implement measures andgauge effectiveness.

・Formulate a human rights policy.
・Introduce section on human rights into the
DIC Group CSR Procurement Guidelines.
・Reinforce awareness of the policy.

・Encourage voluntary human rights inspections ・Implement corrective/remedial measures.
at Group companies.
・Plan and provide human rights training.
・Identify and evaluate the impact of human・Gauge the eﬀectiveness of measures.
rights risks.

４）Disclose information
Report periodically onhuman rights initiatives.
・Provide information via the DIC global website.
・Include information in the DIC Report.
・Publicize using conventional mass media.

| Due Diligence Initiatives to Address Principal Human Rights Challenges
1. Promotion of supply chain due diligence by the Purchasing Department

To ensure that its extended supply chain functions in a socially responsible manner, the Company established the DIC Group Universal Purchasing Policy in 2008,
based on which it also formulated purchasing management regulations, and the DIC Group CSR Procurement Guidelines, which clarify issues it expects suppliers
to address, in 2009. Using the policy and guidelines, the Company promotes CSR procurement by ensuring that all suppliers implement improvements andinitiatives necessary to ensure sustainable procurement, as well as advances respect for human rights and takes comprehensive steps to address human rights
ULVNVVXFKDVFRQÀLFWPLQHUDOVDFURVVLWVVXSSO\FKDLQ
2. Initiatives to help realize a sound, viable mica mining industry in India
0LFDKDVDEURDGUDQJHRILQGXVWULDODSSOLFDWLRQVLQFOXGLQJFRDWLQJVFRVPHWLFVHOHFWURQLFVPDWHULDOVDQGFXWWLQJÀXLGVDQGLVPLQHGDURXQGWKHZRUOG7KHXVHRIFKLOGODERULQWKHPLQLQJRIPLFDLQ,QGLDDOHDGLQJSURGXFHUKDVEHHQLGHQWL¿HGDVDFULWLFDOLVVXHIRUXVHUVDIC Group company Sun Chemical, which oversees the Group’s printing inks, resins and pigments for cosmetics operations in the Americas and Europe, faces
inquiries from coatings industry organizations regarding the source of the mica used in its products. Sun Chemical has conducted inquiries at its suppliers andascertained that it has no dealings with suppliers that use child labor. The company has also communicated its human rights policy—which states that should any
supplier be discovered to use child labor, the company will immediately terminate its relationship with that supplier—to these organizations.
Sun Chemical is also a founding member of the Responsible Mica Initiative, a unique global collaboration established in February 2017 to eradicate child laborin the mica mines of India. Through participation in this initiative, materials producers and cosmetics companies around the world are working to contribute to therealization of a sound, viable mica mining industry.
3. Establishment of whistle-blowing hotlines and corrective measures by the compliance team
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19 human rights–related reports through this system. However, internal investigations revealed no serious violations. Appropriate corrective measures were
implemented in the receipt of reports.
4. Contact procedures and responses to comments and complaints
The Company has established procedures for suppliers, customers, local communities and other stakeholders to report issues by telephone or through its corporate
ZHEVLWHDQGVWULYHVWRUHVSRQGVZLIWO\ZKHQFRPPHQWVRUFRPSODLQWVDUHUHFHLYHG1RFRPSODLQWVSHUWDLQLQJWRKXPDQULJKWVLVVXHVZHUHUHFHLYHGLQ¿VFDO\HDU

DIC Report 2019118

Human Resources Management| Building Trust with the DIC Employees’ Union
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 informationand its vision for the future with union representatives and encourages the frank exchange of opinions. A total of 67.2% of parent company
employees belong to the DIC Employees’ Union. (100% of non-managerial employees are union members.)| Diversity Promotion and Work Style Reform
The DIC Group actively pursues diversity by employing a broad spectrum of individuals without regard to such considerations as gender,
nationality, physical limitation or age. The Group works to foster a corporate culture that draws on its understanding and respect fordiversity to produce creative ideas and to incorporate the concept of diversity into management, thereby creating workplaces that enhance
job satisfaction for employees. The Group’s president and CEO has said, “It is important to recognize that marshaling the diversity of theindividuals that make up our labor force will enable us to respond to social imperatives or even to change DIC itself.” To this end, DIC has
LGHQWL¿HGLQWURGXFLQJDOWHUQDWLYHZRUNLQJDUUDQJHPHQWVWKDWOHYHUDJHGLJLWDOWRROVLQFOXGLQJWHOHFRPPXWLQJDQGÀH[WLPHVKLIWLQJWKHIRFXVRI
evaluations from quantity to quality; and providing support for employees who have childcare or nursing care responsibilities or suffer illness
as the key themes of the human rights strategy set forth in its DIC111 medium-term management
plan. DIC is also promoting ESG management to strengthen its management infrastructure, withinitiatives in Japan emphasizing increasing the percentage of the Company’s management positions
occupied by female employees, the percentage of its overall labor force accounted for by foreign
nationals, and the number of female employees and foreign nationals on its management team.

Targets: Rate of female employees in management positions in Japan: 5.1% (FY2019) ⇒ 8.0% (2021) ⇒ 20.0% (2025)
Rate of foreign employees in Japan: 1.0% (2019) ⇒ 5.0 % (2021) ⇒ 10.0% (2025)
Percentage of executives who are female and/or foreign nationals: 15.0% (FY2018) ⇒ 20.0% (FY2021) ⇒ 30.0% (FY2025)

1

Hiring Diverse Human Resources

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; Japaneseand foreign nationals completing undergraduate or graduate studies at overseas universities;
and experienced mid-career candidates with extensive experience and expertise. At present,
approximately 50 foreign nationals are employed in various capacities at DIC.
Number of Foreign Nationals Currently Employed by DIC
Sales
positionsTechnical
positions

Department/
divisionadministration

3

30

10

Nationalities of Foreign Employees

1
1

1
1
2
3
3

Postedoverseas

Production

Total

5

1

49

Breakdown by
Nationality

3

21

3
10

PRC
ROK
Thailand
Malaysia
TaiwanUnited StatesIndonesia
Spain
Germany
India
CanadaVOICE DIC’s Áexible work environment enables employees to accommodate work plans.
$VDQHZJUDGXDWH,ZDQWHGWR¿QGDMREZLWKDFRPSDQ\WKDWZRXOGKHOSPHJURZDVDFLWL]HQRIWKHZRUOG$VDQRUJDQL]DWLRQZLWKEDVHVDURXQGWKHZRUOG',&ZDVWKHLGHDO
choice. The group I was assigned to is tasked with developing PPS compounds, which are key engineering plastics used widely in automotive components. Because DIC produces
336FRPSRXQGVDW¿YHVLWHVZRUOGZLGHLQFOXGLQJLQ-DSDQZHLQWHUDFWIUHTXHQWO\ZLWKFROOHDJXHVDQGFXVWRPHUVIURPRYHUVHDV6HYHUDOPHPEHUVRIRXUWHDPKDYHH[SHULHQFHZRUNLQJLQRWKHUFRXQWULHVZKLFKPDNHVIRUDORWRIXQLTXHSHUVRQDOLWLHV',&KDVLQWURGXFHGDYDULHW\RIZRUNLQJDUUDQJHPHQWVLQFOXGLQJÀH[WLPHDQGZRUNLQJDWKRPH7KLV
creates a work environment that enables employees to, for example, adjust work hours to accommodate work plans, or use earphones at their desk when they need to concentrate,
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WHFKQLFDOSRVLWLRQVRIWHQKHDU²LVJUDGXDOO\¿QGLQJLWVZD\LQWRHIIRUWVWRUHIRUPZRUNVW\OHVDWP\RZQZRUNSODFH
Polymer Processing Technical Group 2, DIC Corporation

DIC Report 2019

119

Sia-Er Tan

Human Resources Management

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 employees.
+DYLQJHVWDEOLVKHGDIXOOVFDOHSURJUDPWRVXSSRUWHPSOR\HHVLQEDODQFLQJWKHGHPDQGVRIDFDUHHUDQGFKLOGFDUHLQVLQFH¿VFDO\HDU
2016 the Company has pushed ahead with measures to transform employee mindsets and its corporate culture, as well as to provide training
designed to encourage the drive and determination of female employees and broaden the range of jobs open to women.
Creating a Framework for Initiatives,Q¿VFDO\HDU',&HVWDEOLVKHGWKHSRVLWLRQRIGLYHUVLW\RI¿FHULQHDFKRILWVEXVLQHVVXQLWVWRFUHDWHDIUDPHZRUNIRULQLWLDWLYHVLQHDFKEXVLQHVVXQLWWKDWUHÀHFWVWKHDFWXDOVLWXDWLRQRQWKHJURXQG7KHLQGLYLGXDOLQFKDUJHRIGLYHUVLW\IRUWKH*URXSDQGWKHEXVLQHVVXQLWGLYHUVLW\RI¿FHUVPHHW
periodically to exchange information, among others, with the aim of raising the standard of initiatives implemented Companywide.
Transforming Employee Mindsets and the DIC Corporate Culture
In October 2016 DIC held the Women in DIC Forum, which addressed the issue of career opportunities for female employees and welcomed female
executives from multiple DIC Group companies, at its corporate headquarters in Tokyo. Approximately 800 employees—split evenly between female
HPSOR\HHVDQGPDOHPDQDJHPHQWOHYHOHPSOR\HHV²SDUWLFLSDWHGLQWKHIRUXP,QWKH¿UVWVHVVLRQIRXUIHPDOHH[HFXWLYHVIURPRYHUVHDV*URXSFRPSDQLHVgave presentations, while in the second session three female employees in senior positions in Japan joined the four speakers in a panel discussion on
pursing a rewarding career as a way to enrich one’s life. The discussion was broadcast to 14 Group sites across Japan.
As part of its efforts to change the mindsets of management-level employees, in May 2017 DIC held a conference for approximately 300 line supervisors on
the meaning of diversity. The following month, the Company held a roundtable discussion that included an outside director who is board chair of an NPO andas such is well versed in diversity management.
In May 2018, DIC staged a diversity-related event for executives and managers overseeing female employees at its corporate headquarters in Tokyo. The
HYHQWZKLFKZDVDWWHQGHGE\DSSUR[LPDWHO\LQGLYLGXDOVIURPVLWHVDFURVV-DSDQZDVGLYLGHGLQWRWZRSDUWV7KH¿UVWZDVDOHFWXUHWLWOHG³'LYHUVLW\Is a Strategy,” which was given by Yosuke Yagi, CEO of People First, Ltd., whose career includes stints as a human resources manager for General Electric-DSDQ/WGDQGH[HFXWLYHRI¿FHUDQGH[HFXWLYHYLFHSUHVLGHQWRI/,;,/*URXS&RUSRUDWLRQ0U<DJL¶VOHFWXUHWRXFKHGRQDYDULHW\RISRLQWVLQFOXGLQJWLSVIRUEULQJLQJRXWWKHEHVWIURPSHRSOHDQGRUJDQL]DWLRQVWKDWKHDFWXDOO\SXWLQWRSUDFWLFHDW/,;,/DQGDERXWXQFRQVFLRXVELDVHVWKDWLPSHGHWKHFDUHHUVRI
female employees. The second part of the event was a discussion between Mr. Yagi and DIC president and CEO Kaoru Ino titled “Diversity at DIC: The Next
Challenge,” which was moderated by Yukio Ishizuka of Nikkei Inc. In addition to an exchange of views on the results of DIC’s diversity awareness survey, theparticipants looked at the direction of efforts to promote diversity at DIC by examining employees’ understanding and gaps in awareness between female andmale employees, and introducing case studies from other companies.

Women in DIC Forum

Diversity lecture (2018)

People First CEO Yosuke Yagi

Cultivating Leadership Skills,QDPRYHGHVLJQHGWRKHOSHQKDQFHWKHPDQDJHPHQWVNLOOVRIIHPDOHHPSOR\HHVLQ¿VFDO\HDU',&EHFDPHDPHPEHURIWKH-DSDQ:RPHQ¶V,QQRYDWLYH1HWZRUN-:LQ UHJLVWHULQJRQHRUWZRHPSOR\HHVDVLQGLYLGXDOPHPEHUVHDFK\HDUVLQFH$Q132WKDWDVVLVWVHIIRUWVWRSURPRWHDQG¿UPO\HVWDEOLVKGLYHUVLW\PDQDJHPHQW
in the workplace, J-Win engages in a broad range of activities, including advising and serving as a consultant for companies seeking to advance career opportunities
for female employees, organizing seminars and lectures, and conducting surveys. DIC employees participate in a variety of J-Win programs with goals varying from
improving project management capabilities and self-improvement to conducting research using diversity case studies and expanding networking efforts.
,Q¿VFDO\HDU',&HVWDEOLVKHGWKH:RPDQ/HDGHU'HYHORSPHQW3URJUDP :/'3 $WRWDORIHPSOR\HHVSDUWLFLSDWHGGXULQJWKH¿UVWVHVVLRQRIWKLVSURJUDPZKLFKODVWVVL[PRQWKVDQGIHDWXUHVSURMHFWVW\OHWUDLQLQJZKLOHLQ¿VFDO\HDUHPSOR\HHVDUHWDNLQJSDUW
7KDQNVWRWKHVHDQGRWKHUHIIRUWVWRLPSURYHZRUNHQYLURQPHQWVLQ¿VFDO\HDUWKHYROXQWDU\VHSDUDWLRQUDWHIRUIHPDOHHPSOR\HHVRIWKHSDUHQWFRPSDQ\remained in the area of 2%, while the average years of service for female employees once again exceeded that for male employees. DIC continues taking decisive
steps to increase its recruitment of new female graduates from technical schools and bachelor’s and master’s degree programs, expand career opportunities for
IHPDOHHPSOR\HHVFRQGXFWDZDUHQHVVVHPLQDUVIRUHPSOR\HHVTXDOL¿HGIRUH[HFXWLYHDQGPDQDJHULDOSRVLWLRQVDQGH[SDQGLWVWHOHFRPPXWLQJV\VWHP7KURXJKsuch efforts, the Company aims to boost the percentage of management positions occupied by female employees to 8.0% by January 1, 2021. DIC has also
formulated an action plan based on Japan’s Act on Promotion of Women’s Participation and Advancement in the Workplace.

DIC Report 2019120

Human Resources Management

TOPIC
Presentation is Held on Results of Projects Implemented as Part of Program to Foster Female Leaders,Q-XO\DSUHVHQWDWLRQZDVKHOGDW',&¶VFRUSRUDWHKHDGTXDUWHUVLQ7RN\RRQWKHUHVXOWVRISURMHFWVLPSOHPHQWHGDVSDUWRIWKH¿UVWVHVVLRQRI
DIC’s W-LDP, which began in January. During this session, which lasted six months, a total of 25 top-ranking female employees selected from various
departments participated in project-style training. Through project management that closely resembled actual situations, participants worked to acquire theability to independently identify issues, formulate solutions, secure the cooperation of others and work tenaciously to produce concrete results.
For the presentation, teams of program participants addressed key issues facing future female executives in regard to challenges such as reforming
work styles, transforming DIC’s corporate culture and nurturing young employees, and proposed solutions to the General Affairs and HR Department.
3DUWLFLSDQWVFRPPHQWHGWKDWJDLQLQJH[SHULHQFHLQSURMHFWPDQDJHPHQWKDGVWUHQJWKHQHGKHUDZDUHQHVVRIWKHGLI¿FXOW\RIDSSHDOLQJWRRWKHUVWRFUHDWHD
team and that projects necessitated close communication, facilitating the creation of a robust network of contacts across multiple Group sites.

Presentation of project results

Initiatives Aimed at Expanding Career Opportunities for WomenTransform corporate culture andthe mindset of management-level
employees

2007
2015

Encourage the drive and determinationof female employees
Expand opportunities for female
employees
Establish systems to supporta healthy work–life balance forfemale employees and encourage
the use thereof● Message from the president● Seminars to promote awareness● Identical uniforms for male and female employees●Training for employees in administrative positions● Seminars to promote awareness among female employees● Introduction of role models● Assignment of female employees to production and sales positions● Inclusion of female employees in regular system of transfers, reassignments and job rotations● Increase in number of women hired● Establishment of systems to support a healthy work–life balance● Publication of the Libra work–life balance support guide and introduction of e-learning

program for employees taking leave● Introduction of system allowing management-level employees to limit the locations to which

they will accept transfers● Woman in DIC Forum● Diversity seminar for directors and line supervisors● Executive-led lunch seminars for female employees● Roundtable discussion for directors

2018 and beyond

Further expand support
to measures and promoteawareness● Awareness seminars for female employees● Career support seminars for female employees● Woman Leader Development Program(W-LDP)● Launch of telecommuting system● Joint leadership development program with companies in other sectors● ([SDQVLRQRIHOLJLELOLW\IRUÀH[WLPHV\VWHP

Policy for Advancing the Careers of
Female Employees
DIC is committed to creating awork environment in which all
employees can fully exercise theirabilities. To this end, theCompany pledges that female
employees shall enjoy equal
access to career opportunities as
their male counterparts and thatno gender-based restrictions or
barriers shall be applied.

Female Employees inManagement Positions

Stimulate an
appropriate
employee mindset
and corporate
cultureTransform
the mindset of
employees qualified
as candidates
for management
positions

Encourage the drive
and determination of,as well as expand
opportunities for,female employees

Create a Work Environment that
Helps Employees Balance Careerwith Childcare

DIC Report 2019121

As of January 1, 20195.1％

As of January 1, 2021 (Target)

8.0％

Human Resources Management

TOPIC
DIC Earns First Selection as Nadeshiko Brand for Fiscal Year 2018
,QUHFRJQLWLRQRILWVVXSHUEDFKLHYHPHQWVLQH[SDQGLQJFDUHHURSSRUWXQLWLHVIRUZRPHQ',&ZDVVHOHFWHGDVD1DGHVKLNR%UDQGIRU¿VFDO\HDUWKH¿UVWWLPHLWZDVKRQRUHGXQGHUWKLV
program, which is sponsored by Japan’s Ministry of the Economy, Trade and Industry (METI) and the Tokyo Stock Exchange (TSE). The Nadeshiko Brand initiative aims to introduce TSElisted companies judged to be outstanding in terms of efforts to empower women in the workplace as attractive stocks for investors who emphasize medium- to long-term improvements
in corporate value with the aim of accelerating such efforts. The initiative assesses approximately 3,600 companies across all TSE sections based on what they do to promote diversityconscious management and their disclosure of related information.
With the aim of being an organization that enables a broad range of individuals to reach their full potential, DIC has positioned expanding opportunities for its female employees as the¿UVWVWHSLQLWVGULYHWRSURPRWHGLYHUVLW\6LQFH¿VFDO\HDUWKH&RPSDQ\KDVDFWLYHO\SURPRWHGDYDULHW\RILQLWLDWLYHVLQOLQHZLWKIRXUNH\WKHPHV6WLPXODWHDQDSSURSULDWHHPSOR\HH
PLQGVHWDQGFRUSRUDWHFXOWXUHVXSSRUWFDUHHUEXLOGLQJSURPRWHZRUNVW\OHUHIRUPVDQGFRPPXQLFDWHSXEOLFO\,Q¿VFDO\HDU',&LPSOHPHQWHGDYDULHW\RILPSRUWDQWLQLWLDWLYHV
including career-building support seminars attended by female employees and their superiors, a joint leadership development program with companies in other sectors, management panel
discussions on the theme of diversity, and lectures for management-level employees. Reasons cited for DIC’s selection as a Nadeshiko Brand included these initiatives, as well as its efforts
WRFUHDWHZRUNHQYLURQPHQWVWKDWDUHFRQGXFLYHWRMREVDWLVIDFWLRQLQFOXGLQJWKHLQWURGXFWLRQRIÀH[WLPHDQGWHOHFRPPXWLQJV\VWHPVDQGLQVWLWXWLQJPDQGDWRU\³QRRYHUWLPHGD\V´

Ceremony announcing Nadeshiko Brand
selection

3

Management panel discussion on diversity

Career-building support seminar for female
employees and their superiors

Advancing the Employment of Individuals with Disabilities

DIC is committed to creating inclusive work environments that help individuals
ZLWKGLVDELOLWLHVHQMR\DFWLYHDQGIXO¿OOLQJFDUHHUV2QHLQLWLDWLYHZKLFKEHJDQ
LQ¿VFDO\HDULVDQLQWHUQVKLSSURJUDPRUJDQL]HGLQFROODERUDWLRQZLWKD
facility providing support for individuals with intellectual disabilities, designed
to transition into full-time employment. In fiscal year 2018, three program
participants were offered full-time clerical positions.
As of December 31, 2018, individuals with disabilities accounted for 2.41%of DIC’s total labor force, exceeding Japan’s legally mandated quota of 2.2%.
Going forward, DIC will continue working with the Japanese government’s
Hello Work public employment security offices, as well as special needs
schools and other organizations to promote the hiring of individuals withdisabilities, and will take further steps to enhance work environments andincrease workplace accessibility.

Percentage of DIC’s Total Labor Force Accounted
for by Individuals with Disabilities
2.41%

2.50%

2.40%

2.30%

2.20%

2.22%
Percentage of totallabor force accounted forby individuals with disabilities
as of December 31, 2018

2.14%

2.20%

2.06%
2.10%

2.41%

2.04%

Percentage of totallabor force accounted
for by individuals
with disabilities(Legally mandated quota revised)

2.00%

1.90%

1.94%

Japan’s legally mandated quota

1.80%

1.70%

12

13

14

15

16

17

18 (FY)VOICE The kind voices of other employees and DIC executives give me a sense of pride in my job.
I joined DIC Estate in February 2017. My responsibilities are primarily the preparation and serving of tea to guests and the maintenance of employee-use tea dispensers situated
RQHDFKÀRRURIWKH',&%XLOGLQJLQ1LKRQEDVKL0DLQWHQDQFHRIWKHWHDGLVSHQVHUVLQFOXGHVFOHDQLQJWKHGULSWUD\VDQG¿OWHUVDQGUHSOHQLVKLQJVXSSOLHVRIWHDDQGVXJDU,SUHSDUH
DQGVHUYHWHDWRJXHVWVLQWKHH[HFXWLYHUHFHSWLRQURRPRQWKHWKLUGÀRRUDQGFOHDQXSDIWHUWKHJXHVWVKDYHOHIW2WKHUHPSOR\HHVDOZD\VWKDQNPHIRUNHHSLQJWKHHPSOR\HHXVH
tea dispensers clean. DIC executives tell me that guests compliment my proper tea serving etiquette. Compliments like these give me a sense of pride in my job. I will continue
working to keep the tea dispensers in tip-top shape for my colleagues, as well as to further improve my ability to prepare and serve delicious tea that pleases guests.
Business Support Department, DIC Estate Co., Ltd.

Akari Tanaka

Reemployment after Retirement and Support for Retirement Planning
DIC has deployed a system that facilitates the reemployment until age 65 of individuals reaching retirement age (60) and wishing to remain with theorganization. With available options including full-time work, short-time work and work sharing, this system enables reemployed individuals to maximize theirexperience and make full use of their accumulated technological capabilities and specialized expertise, thereby contributing to sustainable growth for the DIC
Group and the training of subsequent generations.
DIC also offers classes for employees within a year of retirement that helps them prepare for life after their careers. These classes provide assistance withretirement planning and education regarding the national pension system, as well as offer retirement lifestyle simulations.
4

DIC Report 2019122

Human Resources Management

Number of Reemployed Individuals

Number of retirees (A)Individuals seeking
reemployment
Number of individuals
reemployed (B)Reemployment rate (B) / (A)Fiscal year 2015

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

126
104
97
77.0％

108
92
91
84.3％

69
55
55
79.7％

89
74
70
78.7％

| Work Style Reform Initiatives that Support a Healthy Work–Life Balance
DIC views a healthy work–life balance as essential to both self-realization and sustainable corporate growth. Accordingly, from the standpoint of corporate healthmanagement*, the Company continues to expand systems intended to facilitate such a balance.
In response to falling birth rates and lengthening life spans, the Japanese government has launched a drive to promote work style reforms, in line with its belief
that positive workplaces lead to higher productivity, with the aim of helping individuals balance the demands of a career and childcare or nursing care and improving
SURGXFWLYLW\6LQFHZHOOEHIRUHWKLV',&KDVSURPRWHGLQLWLDWLYHVDLPHGDWHQDEOLQJDOOHPSOR\HHVWRUHDOL]HERWKDVDWLVI\LQJZRUNOLIHDQGDIXO¿OOLQJOLIHRXWVLGHZRUN
* An approach to employee health management that emphasizes a corporate management perspective and the implementation of strategic measures.

1

Enhancing Programs that Help Employees Balance the Demands of Work and Home

Kurumin Mark CertiÀcation

In 1986, DIC blazed a trail for chemicals manufacturers in Japan by implementing a childcare
leave program. Since establishing a program to support employees in balancing the demandsof a career and childcare in 2007, the Company has continued promoting measures that makeit easier for employees to make use thereof. In fiscal year 2008, DIC acquired the Kurumin
Mark, which recognizes companies that promote initiatives designed to assist employees
in raising children. The Company also deployed a system that gives regular employees theoption to accept or refuse transfers requiring relocation and, since 2012, a system that allows
management-level employees to limit the locations to which they will accept transfers, making
it easier for individuals who are unable to accept transfers that involve relocation because ofchildbirth, childcare, nursing care or other responsibilities.

In 2008, DIC was accordedt he Kur umin M ar k, w hic hrecognizes companies that
actively promote initiatives
designed to assist with childrearing, by Japan’s Ministry of
Health, Labour and Welfare.

Promoting Measures to Retain Employees with Nursing Care Responsibilities,Q-DSDQRQHRIWKHVRFLDOUDPL¿FDWLRQVRIIDOOLQJELUWKUDWHVDQGOHQJWKHQLQJOLIHVSDQVLVDQLQFUHDVHLQWKHQXPEHURISHRSOHUHTXLULQJQXUVLQJFDUHDVDUHVXOWRIZKLFKPRUHSHRSOH¿QGWKHPVHOYHVKDYLQJWROHDYHWKHLUMREVWRWDNHFDUHRIIDPLO\PHPEHUVSteps taken by the government to help address these issues include revising the Child Care and Family Care Law in 2016 to make
LWHDVLHUIRULQGLYLGXDOVWRWDNHOHDYHRUWLPHRIIDQGLQFUHDVLQJEHQH¿WVIRUWHPSRUDU\DEVHQFHVIURPZRUN7RHQFRXUDJHXVHDQG
promote knowledge of its related leave programs, in June 2017 DIC began distributing the Childcare and Nursing Care Handbook.
DIC has also revised the rules of these programs, including making it possible to break up nursing care leave, as well as to shorten
workdays, thereby making it easier for employees to use them.
Major Expansion of the Flextime System
7RIDFLOLWDWHÀH[LEOHZRUNLQJVW\OHVLQ¿VFDO\HDU',&UHVROYHGWRVLJQL¿FDQWO\H[SDQGLWVÀH[WLPHV\VWHPDQGLQ$SULOPDGHWKH
system applicable to all areas of operations other than production floors. The system makes it possible for employees to determine the
WLPHDWZKLFKWKH\HQGWKHLUZRUNLQJGD\WRWKHH[WHQWWKDWLWGRHVQRWKLQGHUEXVLQHVVHI¿FLHQF\DVZHOODVWRVLPXOWDQHRXVO\PDNHXVHRI
telecommuting, with the goal of promoting the independent execution of duties and enhancing self-management capabilities.
Promoting Telecommuting,Q¿VFDO\HDU',&EHJDQH[SORULQJWKHSRWHQWLDORIWHOHFRPPXWLQJDÀH[LEOHZRUNDUUDQJHPHQWWKDWHQDEOHVHPSOR\HHVWRZRUNDWKRPHRUDQRWKHUUHPRWH
location using information and communications technologies (ICT), thus eliminating the time and location constraints of traditional work arrangements. The following
year, employees and management conducted extensive talks to iron out details. After analyzing and evaluating the results of a trial involving 57 employees, inJanuary 2018 the Company launched the DIC Telecommuting System, which is available to all employees regardless of position or workplace. As of December 2018,
approximately 500 employees had registered to use the system.
Looking forward, DIC will continue to create systems that make it possible for employees to choose a working style that suits the type of work they do, as well as theirown personal needs, with the aim of helping encourage a healthy work–life balance. The Company will also continue to promote the independent execution of duties
with the aim of reinforcing self-management capabilities, thereby accelerating efforts to galvanize employees and encouraging them to give full play to their creativity.
DIC Report 2019123

Human Resources Management

VOICE Thanks to the new telecommuting system, both my professional and private life are more fulÀlling.
The way salespeople work has changed from back in the day and responsibilities other than visiting customers continue to increase. In
addition to dealing with internal paperwork, I have to deal with environmental and legal/regulatory inquiries, so one or two days each week
are taken up with deskwork. More than a few of these tasks are conducive to telecommuting. Like most other salespeople, I also workwhen I have a free moment between business trips and when I’m out of the office. Telecommuting allows me to focus before I leave for abusiness trip or when I get home, so I’m able to be much more efficient. I look forward making further use of the telecommuting system toachieve a work–life balance that suits me and helps ensure a more fulfilling professional and private life.
Manager, Tokyo EP Sales Group, Composite Material Products Division, DIC Corporation

Takuro Mikami

DIC Rates 3.5 Stars in the Second Nikkei Smart Work Survey
In November 2018, DIC earned a 3.5-star rating in the Second Nikkei Smart Work Survey, conducted in connection with an initiative by
Nikkei, Inc., designed to support companies working to enhance productivity through work style reforms and contribute to socioeconomic
sustainability and global competitiveness. The survey assigns stars (5, 4.5, 4, 3.5 or 3) to top achievers.
Nikkei uses the Nikkei Smart Work Survey to rate the success of participating companies to translate work style reforms into improved
performance in the categories of human resources, innovation and market development. DIC’s rating of 3.5 stars, an improvement from 3
VWDUVLQ¿VFDO\HDUZDVXQGHUSLQQHGE\KLJKPDUNVJLYHQDFWLRQVWDNHQWRSURPRWHWKHLPSOHPHQWDWLRQDQGXVHRIWHFKQRORJ\QRWDEO\WKHDGRSWLRQRIWRROVWRHQFRXUDJHJOREDOLQIRUPDWLRQVKDULQJDQGWKHXVHRIDUWL¿FLDOLQWHOOLJHQFH $, LQSURGXFWGHYHORSPHQWDQGWRKHOSUHDOL]HGLYHUVHDQGÀH[LEOHZRUNVW\OHVVXFKDVWKHLQWURGXFWLRQRIDWHOHFRPPXWLQJV\VWHPDQGWKHLPSOHPHQWDWLRQRIPHDVXUHVWRDGYDQFH
the careers of female employees.

Work and Childcare Balance Support ProgramsChildcare Leave Program

The maximum length of leave is until the child reaches the age of 2 years and 6 months, which is one year longer thanthe legally mandated leave period.

Leave to Assist with Parenting Program

0DOHHPSOR\HHVFDQWDNH¿YHGD\V¶SDLGOHDYHGXULQJWKHHLJKWZHHNVIROORZLQJWKHLUFKLOG¶VELUWKWRDVVLVWZLWKSDUHQWLQJ

Childcare While Working Program

Employees can shorten their workday by up to three hours until the end of a child’s third year of elementary school.
Employees can also stagger their working hours to accommodate childcare schedules.

Economic support system

This system enables employees on unpaid childcare leave to borrow a portion of their bonuses in advance to pay for,among others, fertility treatment or infant care facility fees.

Return to previous (or equivalent) position

Employees returning from childcare leave must be allowed to return to their previous position or to a position equivalent thereto.

Information sharing topromote program participation

DIC’s views on support for work and childcare balance, as well as a guide to its various available systems and how to makeuse of them, are posted on the Company’s website and intranet.

Nursing care leave system

Employees can take such leave for up to one year, exceeding the statutory maximum of 93 days. As of January 2018, employees
may also break up leave without restriction.

Nursing Care While Working Program

Employees not wishing to take leave while providing nursing care can shorten their workday by up to two hours or opt
for a system in which they shorten their days by two hours before or after prescribed working hours. As of January 2018,
employees may also request to be excused from doing overtime without restriction.

Leave to accompany spouse overseas

Employees can take leave in the form of a temporary overseas assignment to accompany a spouse who is scheduled to
be abroad for more than one year. The period of the leave must be more than one year, with a maximum length of three
years. Employees may make use of this system once during their careers.

Relocation limitation system

Management-level employees may limit the locations to which they will accept transfers that involve relocating because of childbirth,childcare, nursing care or other responsibilities.

DIC Report 2019124

Human Resources Management

Use of the Childcare Leave and Leave to Assist with Parenting Programs
Owing to the introduction of various programs to help employees in balancing the demands of work and home and the creation of an environment that encourages employees
to take advantage of such thereof, the percentage of DIC employees who return to work after making use of the Childcare Leave Program is currently 100%. In addition, thenumber of individuals using the Leave to Assist with Parenting Program, which enables male employees to take time off in the weeks after the birth of a child to assist theirpartner, has risen.
Thanks to efforts to enhance these systems, the average years of employment for female employees has increased and continues to exceed the average for male employees.
Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

28
63

29
64

35
62

35
77

21
81

Number of employees using
the Childcare Leave Program
Number of employees using
the Leave to Assist with Parenting Program

Average Years of Employment (Including Individuals Seconded to Group Companies)
Average years of employment in fiscal year 2018
Male employees(Years)Female employees Overall

18.4 years 19.7 years 18.6 years

25
20
15
10
5
0

94

09

10

Male employees

2

11

12

13

14

15

16

17

18 (FY)

Female employees

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
H[FHHGVWKHDJUHHGXSRQRYHUWLPHOLPLW KRXUVPRQWK KLVRUKHUVXSHUYLVRUDQGWKHVHQLRUH[HFXWLYHLQFKDUJHDUHDXWRPDWLFDOO\QRWL¿HGVRWKDWVWHSVFDQEHWDNHQWRDPHOLRUDWHWKHVLWXDWLRQ7KHVXSHUYLVRULVUHTXLUHGWRVXEPLWDUHSRUWRXWOLQLQJWKHHPSOR\HH¶VZRUNDQGWKHUHDVRQVIRUWKHH[FHVVLYHKRXUVZKLOHDOVRSUHVHQWLQJVSHFL¿Fmeasures to ameliorate the situation, which is also shared with the DIC Employees’ Union, a process designed to curb extreme overwork.
In addition, the Company has instituted a mandatory Groupwide “no overtime day” every Wednesday and on payday, which in Japan is once a month at month-end, in a bid to
HQFRXUDJHHI¿FLHQWZRUNSUDFWLFHVDQGEROVWHUSURGXFWLYLW\ 6LWHVFDQFKDQJHWKHVHGD\VDVDSSURSULDWH ',&DOVRHQFRXUDJHVHPSOR\HHVWRWDNHDQQXDOSDLGOHDYHQRWDEO\E\recommending leave timing at each site and having employees plan dates for such leave.

Average Monthly Overtime Hours Worked and Annual Paid Leave Taken

Average monthly overtime hours
worked per employee
Average annual paid leave granted
Average annual paid leave used
Usage rate for annual paid leave

Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

Fiscal year 2017

Fiscal year 201812.2 hours
19.1days11.0 days
57.6％

12.1 hours
18.8 days
11.2 days
59.6％

12.3 hours
19.1days12.0 days
62.8％

12.2 hours
18.8 days
12.0 days
63.8％

12.0 hours
18.6 days
12.5 days
67.2％| Human Resources Infrastructure Reform
With the rapid expansion of its global operations, DIC recognizes that securing and fostering human resources around the world and creating an environment that encourages
cross-border career advancement and mobility is essential to increasing corporate value. To these ends, since fiscal year 2015 the Company has sought to develop
harmonized promotion, personnel evaluation and remuneration systems, the cornerstone of the global human resources management framework for DIC Group companies
XQGHULWVMXULVGLFWLRQ,Q-DQXDU\',&DQG',&*UDSKLFVXQL¿HGTXDOL¿FDWLRQVWDQGDUGVIRULWVPDQDJHPHQWOHYHO LHPDQDJHUDQGDERYH HPSOR\HHVUHSODFLQJ
traditional ability-based standards with role-based standards. As a consequence, consistent duty- and role-based standards are now used for the majority of such employees in
WKH$PHULFDV(XURSHWKH$VLD±3DFL¿FUHJLRQWKH35&DQG-DSDQ7KH*URXSKDVDOVRLQWHJUDWHGLWVHYDOXDWLRQV\VWHPVIRU*URXSFRPSDQ\SUHVLGHQWVDQGRWKHUH[HFXWLYHV
in Japan and overseas with the goal of encouraging management approaches that are optimal for the Group as a whole from both a medium- and a long-term perspective. The
Group also integrated its global personnel policies to ensure that remuneration is in keeping with local market levels and individual job responsibilities.
,QDGGLWLRQWRWKHVHHIIRUWVXQGHU',&',&ZLOODGYDQFHHIIRUWVWRFRQVROLGDWHHPSOR\HHTXDOL¿FDWLRQV\VWHPVZRUOGZLGHXQLI\TXDOL¿FDWLRQVWDQGDUGVDQGDVVHVVPHQW
formats for management-level employees, and develop an IT system to facilitate the construction of a global human resources platform. Through such efforts, the Company
will realize consistent Groupwide global human resources and personnel management systems.

DIC Report 2019125

Human Resources Management| Securing and Fostering Human Resources
1

Ensuring Fair and Consistent Treatment

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TXDOL¿FDWLRQLVGRQHWKURXJKVFUHHQLQJEDVHGRQREMHFWLYHVWDQGDUGVWKHUHE\JXDUDQWHHLQJHTXDORSSRUWXQLWLHVIRUSURPRWLRQWRDOOPRWLYDWHG
capable employees.
Remuneration and personnel evaluation systems designed to enhance job satisfaction and ensure that individual employees’ abilities
and achievements are assessed appropriately and reflected in a timely manner. Of note, the Company has introduced MBO—a goalsetting management tool that promotes both corporate growth and employee development—into its personnel evaluation system. Resultsof individual evaluations are fed back in full to employees, including reasoning behind determination, in a transparent process that ensures
HPSOR\HHVDUHODUJHO\VDWLV¿HGZLWKHYDOXDWLRQUHVXOWVSettingofdivisiontargets

Setting ofindividual
targets

Interview

ExecutionofdutiesProcess
evaluation

Bonus

SalaryPromotion

Skillsdevelopment

Careerdevelopment
sheet

Individual

2

Results
evaluation

Semiannual
evaluation

Superior

Annualevaluation

Feedback

Appropriate
appointment

Establishment of the Next Management Selection Process,QOLQHZLWKDVWUDWHJ\RXWOLQHGLQ',&WRHVWDEOLVKDSURFHVVIRUVHOHFWLQJWKHQH[WPDQDJHPHQWWHDPLQ¿VFDO\HDUWKH&RPSDQ\embarked on a trial aimed at realizing the mechanism for such a system. The Human Resources Strategy Department, created in JanuaryZLOOSURPRWHFODUL¿FDWLRQRITXDOL¿FDWLRQVIRUNH\SRVLWLRQV7KHGHSDUWPHQWZLOODOVRH[SORUHSURFHVVHVIRUVHOHFWLQJDQGPRQLWRULQJ
promising human resources as well as for the Talent Management Committee to use in matching candidates to positions.

3

Fostering Human Resources to Reinforce Front-Line Capabilities and Accelerate Change

Having recognized fortifying Group organizational
capabilities and enhancing the skills of its people asimportant challenges, DIC has declared the mediumterm focus of its human resources development
program as being to nurture human resources
capable of reinforcing front-line capabilities andaccelerating change.

Medium-Term Focus of DIC’s Human Resources
Development Program
Nurture human resources with the aim of realizing
sustainability and achieving the targets of DIC111This program, which is divided into six categories,

Accelerate change

is based on curricula that emphasize a systematic
approach to helping each employee acquire
critical skills. Since fiscal year 2016, training hasemphasized the concepts of “global” and “diversity,”
with areas emphasized including training to improve
English-language skills and Japanese-language
training for non-native speakers.

Reinforce front-line
capabilities

Fundamental
capabilities as a
DIC employee

DIC Report 2019

126

Foster human resources with the skills
necessary to promote the steady growth ofbusinesses, maintaining awareness of theimportance of sustainability• Step up efforts to nurture young employees• Reinforce leadership skills• Strengthen management capabilities• Enhance department- and job-specific skills

Foster human resources with the skills
necessary to drive change in businesses toensure DIC is always ahead of the times• Propose solutions that respond to changing business styles• Develop products that leverage compounding technologies• Give full play to comprehensive skills• Accelerate globalization

Human Resources Management

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 human resources
development

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

Preparatory training for employees assigned to overseas posts, Next Global
Human Resources Development Program, Target Global Program (training
to enhance English-language communication skills), Effective E-Mailing(training in how to compose e-mails in English), Japanese-language training
for employees who are not native speakers, Area studies

Level-speciÀc training(GXFDWLRQDQGWUDLQLQJWRHTXLSHPSOR\HHVZLWKWKHVNLOOVWRIXO¿OOUHVSRQVLELOLWLHVDWHDFKOHYHO4XDOL¿FDWLRQVSHFL¿FWUDLQLQJ -06VHQLRU WUDLQLQJWDLORUHGWR
different management ranks

Department- andjob-speciÀc training

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

Workplace-specific on-the-job training, domestic technical department trainee
program, Overseas Trainee Program, Global Capability Development (GCD) Program

Self-development

Support for employees seeking to enhance their skills

Correspondence courses, e-learning courses, in-house seminar courses,
Skype-based English conversation courses, preparatory courses for the TOEIC
Institutional Program (IP) Test

Training to Enhance Proposal Development Capabilities
6LQFH¿VFDO\HDU',&KDVRIIHUHGDVHULHVRIFRXUVHVWKDWIRFXVRQFXOWLYDWLQJSURZHVVLQWKHDUHDRISURSRVDOGHYHORSPHQWLQOLQH
with its goal of reinforcing front-line capabilities. In the advanced course, which primarily targets senior manager–level employees, groups of¿YHRUVL[LQGLYLGXDOVIURPVDOHVDQGWHFKQLFDOGHSDUWPHQWVIRUPFURVVGHSDUWPHQWSURMHFWWHDPVZKLFKVHOHFWSUDFWLFDOFXVWRPHUFHQWHUHG
themes, and work to formulate solutions to pertinent hypothetical issues and further hone their ability to prepare and present proposals. The
course, which lasts nine months, encompasses approaches to development of innovative proposal themes and angles, problem solving andpersuasive presentations, among others, with professional business consultants offering advice and guidance at each stage.
&RXUVHZRUNLVLQDGGLWLRQWRSDUWLFLSDQWV¶UHJXODUUHVSRQVLELOLWLHVVRSDUWLFLSDQWVKDYHDORWRQWKHLUSODWHVEXWWKH\¿QGWKDWWKH\DUHDEOHWR
apply newly acquired skills almost immediately, greatly improving front-line capabilities. Participants have also used their selected themes to
PDNHSURSRVDOVWRDFWXDOFXVWRPHUVPDQ\RIZKLFKKDYHUHDFKHGWKHYHUL¿FDWLRQVWDJH

| Global Talent Development
DIC has positioned the fostering of global human resources as a key theme of DIC111. Accordingly, the Company is taking steps to, among
RWKHUVGH¿QHWKHOHYHORIDQGVHWUHTXLUHPHQWVIRUJOREDOKXPDQUHVRXUFHVDVZHOODVWRV\VWHPDWL]HWUDLQLQJ (QJOLVKODQJXDJHDELOLW\competency and work experience) programs.
Offering the Overseas Trainee and GCD Programs
The goal of DIC’s Overseas Trainee Program is to foster global human resources by dispatching selected employees from Japan to work at a',&*URXSFRPSDQ\LQDQRWKHUFRXQWU\IRUDVSHFL¿HGSHULRGWKHUHE\KHOSLQJWKHPGHYHORSDPRUHLQWHUQDWLRQDOPLQGVHWLPSURYHWKHLUVNLOOVDQGEXLOGQHWZRUNVZLWKWKHLUFROOHDJXHVRYHUVHDV$VRIWKH¿VFDO\HDU\HDUHQGLQGLYLGXDOVZHUHSDUWLFLSDWLQJLQWKLVSURJUDP
Under the GCD Program, employees from overseas Group companies are sent to work at DIC Group companies in Japan. Positioned aspart of the Group’s effort to foster global human resources and promote diversity, this program gives future business leaders a chance to learn
new skills and Japanese business techniques and to network with Group
Overseas Trainee Program Destination Country of Origin and Number
colleagues, as well as to deepen their understanding of Japan’s culture
and Number of Employees Dispatched of Participants in the GCD Programand commercial practices. This program also brings domestic employees
in Fiscal Year 2018
in Fiscal Year 2018
in contact with other cultures and provides an opportunity for them toIndonesia
United States
43
polish their English-language skills and acquire a global perspective. In
Malaysia
PRC
1
6¿VFDO\HDU*URXSFRPSDQLHVLQVL[FRXQWULHVVHQW*&'3URJUDP
Indonesia
ROK
1
3
participants to spend between three months and one year at sites inAustria
Singapore1
1Japan. Through the Overseas Trainee and GCD programs, DIC seeks
India
Malaysia
1
to advance the globalization of the overall DIC Group, as well as to1
PRC
United Kingdom
encourage smooth cooperation between Group companies in Japan and21
their counterparts overseas.
United Kingdom
2Vietnam

DIC Report 20191271

Human Resources Management

Encouraging Understanding of Islamic Culture
Fostering an understanding of religion-based differences in everyday lifestyles is an important aspect of DIC’s efforts to promote diversity.
In February 2017, prior to the arrival of GCD Program participants from Indonesia, managers and assistant managers at the Kashima
Plant, in Ibaraki Prefecture, attended a lecture designed to give them a basic knowledge of Islamic culture, during which they learned about
SUDFWLFHVWKDWKDYHGHYHORSHGDURXQGWKHUHOLJLRQRI,VODPZKLFKLVWKHUHOLJLRQRIRI,QGRQHVLDQVLQFOXGLQJSUD\LQJ¿YHWLPHVDGD\eating halal food (food that conforms with Islamic dietary laws) and fasting during the month of Ramadan. The lecture helped the plant makenecessary preparations for its visitors, including setting aside a space for prayer during the day and giving consideration to working hours,
food choices and other factors after they arrived. Despite a certain amount of initial bewilderment on the part of both plant employees andprogram participants, earnest efforts to communicate helped enhance understanding of each other’s cultures and customs. In March 2018,
the two Indonesian employees completed their assignment and returned home. Information on the Indonesian employees’ experiences at the
Kashima Plant were shared with other Group production facilities in Japan, helping ensure a welcoming environment for new recruits from
0DOD\VLDZKRMRLQHG',&LQ¿VFDO\HDU

Next Global Human Resources Development Program
Since fiscal year 2017, DIC has offered the Next Global Human Resources Development Program for mid-tier employees designed toenhance global business skills. Each year, 20 individuals in their 30s and 40s are selected to take part in the program, which includes
language classes taught by native English speakers that focus on improving presentation, negotiation, debate and other skills. The Company
also provides individual training designed to improve English-language capabilities, including one-on-one Skype-based training focused on
improving conversational skills and TED talk* listening and dictation classes. At the conclusion of the 11-month program, in April, participants
divide into six teams, each of which is tasked with discussing their vision for DIC 10 years in the future and giving a presentation on the
topic in English to the president and executive officers, as well as to their own boss and colleagues. All individuals who complete the
SURJUDPUHFHLYHDFHUWL¿FDWH',&ORRNVIRUZDUGWRFRQWLQXLQJWRRIIHUWKLVSURJUDPZKLFKLWYLHZVDVFUXFLDOWRIRVWHULQJWKH&RPSDQ\¶VQH[W
generation of executives.
* TED (Technology, Entertainment, Design) talks are conferences conducted by U.S. media NPO TED, LLC, that are posted online for free distribution. The talks address a wide range of topics
DQGDUHJLYHQE\IURQWOLQHOHDGHUVLQYDULRXV¿HOGVLQYLWHGWRVHUYHDVVSHDNHUVNext Global Human Resources Development Programis what I learned as a participant in the second round of the Next Global Human Resources
VOICE This
Development Program.
Ever since I joined DIC, I have felt a need for English in my work and wanted to do something about my poor English skills, but before I
realized it 20 years had passed! When I was given the opportunity to participate in the second round of the Next Global Human Resources
Development Program, I saw it as my last chance to study English seriously.
About 80% of the 11-month program was conducted in English, so it was tough going and I spent a lot of time feeling puzzled andstressed, but under the guidance of the program’s knowledgeable, experienced and passionate instructors I not only improved myEnglish but also acquired key skills necessary to function in a global business environment. I found the three global communication skills
assessment sessions particularly useful as they helped strengthen my English-language presentation, negotiating and communication
skills. I’m proud to say that I was definitely among the most enthusiastic and studious participants!
The benefits of the program were not limited to improved skills. The extremely challenging nature of training encouraged participants tocommiserate. As a result, we all got to know colleagues from other departments, creating a network of program participants that will surely
be a valuable asset going forward. I will continue to build on what I learned in this program, as well as to polish my English so that I am
ready when the opportunity to work overseas arises.
General Manager, Performance Material CS Group, Performance Material Products Group, DIC Corporation

DIC Report 2019128

Kengo Sakamoto

Human Resources Management| Caring for Mental and Physical Health
DIC takes steps to create environments in which employees feel physically and mentally supported and works to ensure that its labor management practices comply with relevant
laws. The Company places a high priority on caring for psychological and emotional well-being and has established a comprehensive mental health program, highlights of which
include engaging an in-house occupational psychologist, promoting initiatives aimed at warding off mental health problems and extending support to ensure a smooth return
to work for employees taking leave. In particular, access to counseling provided by an occupational psychologist has had a considerably positive impact in terms of ensuring
employees get treatment and are able to return to work as quickly as possible.
',&KDVDOVRRIIHUHGYROXQWDU\VWUHVVFKHFNVVLQFH¿VFDO\HDUDQGSURPRWHVDFWLYHV\VWHPDWLFHIIRUWVZLWKWKHDLPRISUHYHQWLQJPHQWDOKHDOWKGLVRUGHUVLQDFFRUGDQFH
ZLWKUHODWHGOHJLVODWLRQSDVVHGLQ-DSDQLQ¿VFDO\HDU,Q¿VFDO\HDU',&FRQGXFWHGVHPLQDUVOHGE\DQLQKRXVHSK\VLFLDQDWVLWHVWKDWKDYHVFRUHGDERYHDFHUWDLQ
level in voluntary stress checks and provided counseling aimed at helping employees improve communications with supervisors, colleagues and family members. The Company
will promote the ongoing, systematic implementation of these initiatives.

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 or counseling or making workplace improvements.

Initiatives to Support Employee HealthKokoro no Kenko
self-check handbook

DIC has always analyzed the results of employees’ annual physicals and provided assistance to employees for whom
lifestyle improvements have been recommended by providing introductions to hospitals and clinics. The Company has
also sought to contribute to good health for employees by encouraging the use Spirulina—a noted superfood* that is
manufactured by a DIC Group company—as an ingredient in cooking.
,Q¿VFDO\HDU',&¶V+HDOWKFDUH2I¿FHDQGWKHFRPSDQ\UHVSRQVLEOHIRUWKHRSHUDWLRQRIWKHFRUSRUDWHKHDGTXDUWHUV¶
employee cafeteria collaborated to develop a new healthy cafeteria menu. The new menu, dubbed DIC Irodori Care+ (“DICColorful Care+”) was launched in February 2017, beginning with the cafeteria at the Company’s corporate headquarters
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selections, including reduced calories and low sodium content, to encourage use.
DIC will continue implementing measures designed to help ensure the physical and mental health of its employees aspart of its commitment to creating a work environment in which all employees can fully exercise their abilities.
* The term “superfood” is used to describe standard foods with an excellent balance of nutrients that provide health benefits and foods
FRQWDLQLQJVSHFL¿FQXWULHQWVDQGRULQJUHGLHQWVJRRGIRUKXPDQKHDOWKA new healthy cafeteria menu selection

DIC Earns ´White 500µ CertiÀcation in the Health & Productivity Outstanding
Entities Recognition Program
DIC earned certification in the large enterprise category (dubbed the “White 500”) of the 2019 Health& Productivity Outstanding Entities Recognition Program, which is organized by Japan’s Ministry of
Economy, Trade and Industry (METI) and Nippon Kenko Kaigi*1. This is the second consecutive year the&RPSDQ\KDVEHHQFHUWL¿HGXQGHUWKLVSURJUDP%\VKLQLQJDVSRWOLJKWRQRXWVWDQGLQJHQWHUSULVHVZRUNLQJto advance health and productivity management, this program seeks to create an environment that ensures such enterprises gain enhanced public recognition—
LHIURPHPSOR\HHVMREVHHNHUVUHODWHGFRPSDQLHVDQG¿QDQFLDOLQVWLWXWLRQV²DVRUJDQL]DWLRQVWKDWDSSURDFKHPSOR\HHKHDOWKDQGSURGXFWLYLW\IURPDPDQDJHPHQW
perspective and promote strategic initiatives.
In addition to looking at whether enterprises stipulate health management in their corporate mission and disclose pertinent information, the Health & Productivity
Outstanding Entities Recognition Program assesses performance based on three criteria, namely, grasp of employee health-related issues and consideration ofactions, establishment of a foundation for the practical implementation of health and productivity management measures and work engagement*2, and promotion of
HIIRUWVWKDWKHOSHQVXUHWKHSK\VLFDODQGPHQWDOKHDOWKRIHPSOR\HHV,QERWKDQG',&UHFHLYHGVFRUHVVLJQL¿FDQWO\DERYHWKHLQGXVWU\DYHUDJHIRUDOOWKUHH
RIWKHVHFULWHULD¿QLVKLQJLQWKHWRSZLWKD¿YHVWDUUDWLQJ
Going forward, DIC will continue to implement measures designed to help ensure the physical and mental health of its employees as part of its commitment tocreating a work environment in which all employees can fully exercise their abilities.
*1 Nippon Kenko Kaigi (“Japan Health Council”) is an organization that liaises with private companies, with the full backup of the government, to put effective measures in place to prolong thehealthy life expectancy of citizens and to ensure sound medical services in Japan.
*2 A concept used to measure employees’ mental health, work engagement is described as a positive, fulfilling work-related state of mind that is characterized by vigor, dedication andabsorption. “Vigor” is taking pride and experiencing a sense of satisfaction in one’s work, “dedication” is feeling strongly involved in and focused on one’s work, and “absorption” is being
actively engrossed in one’s work.

DIC Report 2019129

Human Resources Management

DIC Group Site Employee Cafeterias Earn Smart Meal CertiÀcation
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FDWHJRU\RIWKH¿VFDO\HDU6PDUW0HDO3URJUDPHDUQLQJWKHKLJKHVWSRVVLEOHUDWLQJRIVWDUV7KH6PDUW0HDO3URJUDPZKLFKLV
administered by a consortium of 11 academic associations, including the Japanese Society of Nutrition and Dietetics and the JapaneseSociety of Nutrition and Food Service Management, was established to recognize restaurants, corporate facilities and other establishmentsthat promote the continuous provision of nutritionally balanced menu options—i.e., “smart meals”—in healthy eating environments.
Under the Smart Meal Program, restaurants, corporate sites and other establishments that satisfy essential requirements, which
include a menu that meets Smart Meal standards and the creation of an appropriate management system and easy-to-understand efforts
to communicate benefits, and 10 or more optional conditions related to the promotion of healthy diets and eating environments, earn
FHUWL¿FDWLRQZLWKDVWDUUDWLQJ&HUWL¿FDWLRQXQGHUWKH6PDUW0HDO3URJUDPLVGLYLGHGLQWRWZRFODVVHV³:KROHVRPH´ ±NFDO DQG³+HDUW\´ ±NFDO ',&¶V
FRUSRUDWHKHDGTXDUWHUVZDVFHUWL¿HGLQERWKFODVVL¿FDWLRQVZKLOHWKH2VDND%UDQFK2I¿FHDQGWKH6DNDL3ODQWZHUHFHUWL¿HGLQWKH³:KROHVRPH´
class. All three also work with the companies responsible for the operation of their employee cafeterias to improve cafeteria quality. At corporate
headquarters, these efforts focus on developing menus that take into account the results of annual employee health checkups. At the Osaka%UDQFK2I¿FHWKHIRFXVLVRQSURPRWLQJKHDOWKFRQVFLRXVQHVVE\SURYLGLQJFOHDUDJHVSHFL¿FLQIRUPDWLRQRQHQHUJ\FRQVXPSWLRQZKLOHDWWKH
6DNDL3ODQWWKHHPSKDVLVLVRQFUHDWLQJPHQXVWKDWUHÀHFWWKHUHVXOWVRIHPSOR\HHSROOVDQGPDNHXVHRIUHJLRQDOLQJUHGLHQWVsought to develop a uniquely DIC program of everyday meals that would contribute to the
VOICE We
health of employees.
Individual DIC sites promote a variety of menu alternatives that encourage employees to be more conscious of the relationship between theirhealth and what they eat. At corporate headquarters, we planned a menu of colorful vegetable-rich deli-style options and nutritious side dishes,
which we dubbed “DIC Irodori Care+” (“DIC Colorful Care+”). The response has been extremely positive, underscoring general support for foodthat is both enjoyable and contributes to good physical health.
:HZHUHSOHDVHGWRVHH',&,URGRUL&DUHHDUQFHUWL¿FDWLRQXQGHUWKH6PDUW0HDO3URJUDPDQGZLOOZRUNWRIXUWKHUHQKDQFHWKHTXDOLW\RIWKH
PHQX,ORRNIRUZDUGWRFRQWLQXLQJWRZRUNZLWKRXU+HDOWKFDUH2I¿FHDQGWKHFRPSDQ\UHVSRQVLEOHIRURSHUDWLRQRIWKHFRUSRUDWHKHDGTXDUWHUV¶
employee cafeteria to help ensure the health of employees.
General Aﬀairs and HR Department, DIC Corporation

DIC Report 2019130

Naoko Ogawa

Sustainable Procurement

SDGs Goal 12

Promoting Socially Responsible Procurement Across the Supply Chain
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Goals for fiscal year 2018

Achievements in fiscal year 2018

Fo r r a w m at e r i a l s p r o c u r e d i n
Greater China, minimize
procurement-related risks by closely
inspecting the responses toenvironment al regulations andimplementing countermeasures toaddress issues.

On-site inquiries were conducted at
11 suppliers in the PRC, enabling
D I C to g ain a g r as p of c ur r e nt
conditions from the perspective ofsustainability. For raw materials
subject to procurement-related risks,
this led to the formulation of
measures to reduce such risks,
including shifting to supply sources
outside the PRC.

For suppliers of raw materials used incore businesses that are based in the
A si a – Pa c i f i c r e g i o n, i m p l e m e nt
detailed inquiries regarding efforts toaddress the aging of equipment,
among others, to gain a solid grasp ofrisks, thereby ensuring procurement
stabilit y, from the perspective of
business continuity.

D I C b e g a n c o n d u c t i n g o n - s i teinquiries at raw materials suppliersin India, but the implementation ofdetailed inquiries in other regions
was positioned as a key initiative forfiscal year 2019.

Promote CSR procurement.

Evaluation

Goals for fiscal year 2019★★

For Greater China–based suppliers ofm at e r i a l s ( i n c l u d i n g p r i m a r y r aw
materials) for which the DIC Groupdepends heavily on the PRC, reduce
procurement-related risks by closely
i n s p e c t in g s u s t ai n a b i l i t y ef f o r t s ,including responses to environmental
regulations, and implementing
countermeasures to address issues.

★★

Reduce procurement-related risks
by seeking out supply sources otherthan Greater China from theperspective of ESG, among others,
to diversify supply sources.

Basic Approach to Sustainable Procurement
Having recognized the increasing importance of addressing global issues related to human rights, climate change and water risk, among others, as social imperatives,
the DIC Group promotes socially responsible procurement practices. To ensure its extended supply chain functions in a socially responsible manner, the DIC Groupestablished the DIC Group Universal Purchasing Policy, based on which it also formulated purchasing management regulations, in 2008 and the DIC Group CSR
Procurement Guidelines, which clarify issues it expects suppliers to address, in 2009. Using the policy and guidelines, the Group promotes CSR procurement acrossits supply chain by ensuring that all suppliers implement improvements and initiatives necessary to ensure the sustainability of Group procurement. Group companies
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Note: For more information, please visit WEB http://www.dic-global/en/csr/stakeholder/partner.html

The DIC Group Universal Purchasing Policy

The DIC Group CSR Procurement Guidelines

Guided by an action policy established to realize the DIC Group’s basic sustainable procurement
principles, the Purchasing Department adheres to the following guidelines in dealing with suppliers:❶ Compliance with laws and social norms❷ Respect for human rights and consideration❶ Fair and transparent business practices

The DIC Group will implement fair and open purchasing activities with suppliers based on global
perspectives, without the constraints of conventional commercial customs.
❷ An appropriate purchasing process and the building of relationships of mutual trust

The DIC Group, as a good partner for suppliers, will build long-lasting, mutually trusted relationships with
VXSSOLHUVDQGZRUNWRJHWKHUZLWKWKHPIRUPXWXDOKDUPRQ\DQGEHQH¿WZKLOHFRPSO\LQJZLWKUHOHYDQWregulations/social norms, domestic and overseas, and pursuing adequate quality and prices.
❸ Satisfying environmental/safety needs

The DIC Group will take responsibility as an exemplary corporate citizen for environmental affairs,
occupational safety, human health and product quality, always take into account changes in society andimplement environment-friendly purchasing activities.
❹ Challenge the creation of new value

In order to respond at a high level to a new value sought by society, the DIC Group will proactively
challenge the creation of such value together with suppliers, with whom the same goal can be shared,
and strive to grow together with them in a sustainable manner.

DIC Report 2019131

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 andrespond to change❾ Contribution to local communities and society❿ Promoting CSR and deploying it in the supply chain

Sustainable Procurement| Encouraging CSR Procurement
Based on the DIC Group Universal Purchasing Policy, and incorporating requirements contained in guidebooks put out by external organizations including
the Japan Electronics and Information Technology Industries Association (JEITA), DIC formulated the DIC Group CSR Procurement Guidelines, a seriesof requirements pertaining to ESG-related imperatives, including the management of chemical substances in and reduction of the environmental impact
of raw materials, as well as respect for human rights across its entire supply chain. With the aim of compelling suppliers to observe these guidelines, the
DIC Group conducts assessments and on-site inquiries in accordance with the DIC Group Supply-chain CSR Deployment Guidebook. (Version 2 of theguidebook was published in July 2013.) In addition to obliging suppliers to ensure the stringent management of chemical substances through the DIC Group
Green Procurement Guidelines, the Group entreats suppliers to develop and release products that have less of an impact on the environment and promote
green procurement themselves. Also encourages suppliers to lower the environmental impact of materials they procure, and of the packaging, transport,
production and engineering thereof, by trimming resources and energy used in, decreasing the weight and expending the useful life span of, and reducing
CO2 emissions from such materials. Such measures have proven effective in strengthening the Group’s relations with suppliers.

| The DIC Group Green Procurement Guidelines
In line with the DIC Group Universal Purchasing Policy, DIC formulated the DIC Group Green Procurement Guidelines, which prohibit the procurementof materials containing hazardous substances in seven categories*17KHJXLGHOLQHVPDQGDWHWKHVXEPLVVLRQRID',&5DZ0DWHULDOV6XUYH\DQ
SDS and a chemSHERPA*2, as well as a DIC Group Green Procurement Guidelines Survey, when purchasing raw materials, thereby creating a system for
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Persistent Organic Pollutants.
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| Advance Assessment of New Suppliers,QDGGLWLRQWRUHTXLULQJVXEPLVVLRQRIWKHIRXUPDQGDWRU\GRFXPHQWVOLVWHGDERYHDVZHOODVD&RQÀLFW0LQHUDOV6XUYH\',&FRQGXFWVFRPSUHKHQVLYH
advance assessments of major new suppliers, including from a CSR perspective.

| Supplier Self-Evaluation
In accordance with version 2 of the DIC Group Supply-chain CSR Deployment Guidebook, the DIC Group asks suppliers to completequestionnaires, which it uses to ascertain the status of suppliers’ CSR procurement practices. The questionnaire further segments the*URXS¶VSURFXUHPHQWJXLGHOLQHVLQWRLVVXHVLQFOXGLQJJUHHQSURFXUHPHQWDFTXLVLWLRQRI,62FRQVLGHUDWLRQIRUKXPDQULJKWVand the work environments, and promoting CSR procurement to secondary suppliers.
DIC Group Supply-chain CSR Deployment Guidebook (Ver. 2 in English) (published in July 2013): WEB http://www.dic-global.com/en/about/purchase/pdf/dic_sc_csr_en.pdf

Assessment Distribution Chart (753 Suppliers)| Analyzing the Results of Questionnaires,Q¿VFDO\HDUWKH',&*URXSFRQGXFWHGDVVHVVPHQWVIRUQHZ
and continuing suppliers using version 2 of the DIC Group Supplychain CSR Deployment Guidebook. This brought the total number ofsuppliers assessed between November 2013 and December 2018 to753, accounting for 90%-plus of its procurement spending. In addition
to analyzing and assessing questionnaire responses, the Group
provided feedback to all 753 suppliers and where necessary requested
FRUUHFWLYHPHDVXUHVIRUVLJQL¿FDQWLVVXHVWKURXJKRQVLWHLQTXLULHVRU
ZULWWHQFRPPHQWV,Q¿VFDO\HDUWKH*URXSSODQVWRXSGDWHWKH
DIC Group Supply-chain CSR Deployment Guidebook.
Cumulative Number ofSuppliers Assessed(November 2013–December 2018)

410

400

Number of suppliers

350
300
250
200

147

150
100
50
0

1

50
25 39

81

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

Low

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.

Equivalent to 90%-plus ofprocurement spending

753
DIC Report 2019

132

High

Sustainable Procurement| Conducting On-Site Inquiries)URP¿VFDO\HDUWKURXJK¿VFDO\HDUWKH',&*URXSFRQGXFWHGRQVLWHLQTXLULHVIRUVXSSOLHUV7KHREMHFWLYHRIWKHVHLQTXLULHVLVWRKHOSVXSSOLHUVIXUWKHUWKHLUXQGHUVWDQGLQJRI&65,QDQRQVLWHLQTXLU\WKH*URXSDQGWKHVXSSOLHUFRQ¿UPWKHUHVSRQVHVSURYLGHGE\WKHVXSSOLHULQWKHDVVHVVPHQWTXHVWLRQQDLUH2WKHUHIIRUWV
include introducing examples of Group initiatives designed to advance CSR procurement and realize sustainability.

| Global Procurement Initiatives,Q¿VFDO\HDU',&DQGUHJLRQDOKHDGTXDUWHUVLQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQFRRSHUDWHGWRFRQGXFWRQVLWHLQTXLULHVIRUVXSSOLHUVLQFRUH
businesses in the PRC based on the suppliers’ CSR procurement assessment responses. DIC also worked with these suppliers to fortify understanding ofissues related to local environmental regulations, and of environmental issues in the supply chain related to local legal and regulatory compliance, as well as
to request corrective actions. Information on these on-site inquiries was shared at a global procurement conference with Sun Chemical.

| Ensuring the Sustainable Procurement and Use of Raw Materials
The DIC Group promotes the sustainable use of raw materials from a medium- to long-term perspective. This includes giving consideration to a wide
UDQJHRIIDFWRUVLQFOXGLQJFOLPDWHFKDQJHDQGUHVRXUFHFRQVHUYDWLRQZKHQXVLQJUHF\FODEOHPDWHULDOV/RRNLQJDKHDGWKH*URXSZLOOH[SDQGWKHJOREDO
application of its sustainable raw materials initiatives.

| ConÁict Minerals
In compliance with the U.S. Securities and Exchange Commission(SEC)’VUHTXLUHPHQWIRUOLVWHGFRPSDQLHVWRUHSRUWRQWKHLUXVHRIFRQÀLFW
PLQHUDOVWKH',&*URXSSXEOLVKHGLWV%DVLF3ROLF\FRQFHUQLQJ&RQIOLFW0LQHUDOVRQLWVJOREDOZHEVLWH7KLVSROLF\RXWOLQHVWKH*URXS¶VSOHGJHWRUHIUDLQIURPXVLQJJROGWDQWDOXPWXQJVWHQDQGWLQZKLFKDUHFODVVL¿HGDVFRQÀLFWPLQHUDOVWKDWLVPLQHUDOVPLQHGLQFRQGLWLRQVRIDUPHGFRQÀLFWDQGDEXVHLQWKH'HPRFUDWLF5HSXEOLFRIWKH&RQJRDQGLWVQHLJKERULQJFRXQWULHV7KHSROLF\DOVRVWDWHVWKDWVKRXOGDQ\
raw materials purchased from third-party suppliers be found to contain conflict minerals, the DIC Group will immediately terminate the
SURFXUHPHQWWKHUHRI7KH',&*URXSXVHVWKH&RQÀLFW0LQHUDOV5HSRUWLQJ7HPSODWHSUHSDUHGE\WKH5HVSRQVLEOH%XVLQHVV$OOLDQFH 5%$ 
DQGWKH&RQÀLFW)UHH6RXUFLQJ,QLWLDWLYH &)6, WRFRQGXFWFRQÀLFWPLQHUDOVDXGLWVDFURVVLWVHQWLUHVXSSO\FKDLQ$VRI'HFHPEHUUHVSRQVHVKDGEHHQUHFHLYHGIRUPRUHWKDQRIWKHLWHPVFXUUHQWO\SURFXUHGE\*URXSSXUFKDVLQJGHSDUWPHQWV,Q¿VFDO\HDUWKH
Group has begun conducting audits using the Cobalt Reporting Template, which addresses cobalt in the supply chain.

VOICE We are pursuing continuous improvements with the aim of ensuring sustainable procurement.
,KDYHZRUNHGLQWKH3XUFKDVLQJ'HSDUWPHQWRI6LDP&KHPLFDO,QGXVWU\IRUURXJKO\\HDUVToday, companies worldwide face an ever-more diverse array of challenges, including rising awareness of the need to achieve sustainability. The role of Siam
Chemical Industry’s Purchasing Department has been changed so as to move forward activities with an accurate understanding of social requirements based on the DIC
Group’s basic sustainability policy, which emphasizes CSR. Accordingly, the department now has the added responsibility of reducing social and environmental impacts
through cooperation with partners and customers across our supply chain. The department will work diligently in this regard, and will also convey information in a timely
manner as stakeholders today are as interested in environmental and social governance as they are in quality, cost and delivery (QCD).
Siam Chemical Industry was awarded a silver medal for its CSR performance by EcoVadis in February 2019. We hope to eventually earn a gold medal by
VWUHQJWKHQLQJRXUVXSSO\FKDLQWKURXJKRQJRLQJLPSURYHPHQWDFWLYLWLHVUDWKHUWKDQEHLQJVDWLV¿HGZLWKZKHUHZHDUHQRZ7KLVZLOOQRWEHHDV\$VWKHUHTXLUHPHQWVRI
customers and society change constantly, it is necessary to realize sustainable procurement corresponding to that change.
I will continue to learn more about sustainable procurement and will work to further promote the exchange of information with both suppliers and the DIC Group, thereby
increasing understanding as well as support to ensure we meet our goals. I would also like to see the DIC Group as a whole realize more advanced sustainable procurement.
Purchasing Department, Siam Chemical Industry Co., Ltd.

DIC Report 2019133

Wantanee Prodpran

Business Models that Respond to Social Imperatives

SDGs Goals 8, 9 and 11

Cultivating Next-Generation Businesses

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Propose solutions - or iented
businesses that respond to social
imperatives.

Goals for fiscal year 2018

Achievements in fiscal year 2018

Evaluation

Goals for fiscal year 2019

Implement value chain–oriented marketing and emphasize two perspectives,
namely, DIC Group products and customers/regions, with the goal of expanding
the Group’s operating foundation andhelping to increase consolidated net
sales.

Through collaboration with biotech startups and efforts to create next-generation
businesses such as thermally conductive
fillers and environmental sensors, the DIC
Group made steady progress toward
entering promising new markets .

★★★

Bolster collaboration with external organizations and promote prompt commercialization with the aim of advancing thecreation of next-generation businesses
that enhance sustainability and reinforce
the Group’s ability to propose supply
chain–oriented solutions.

Participate in trade shows for key customer industries in Japan and overseas tostrengthen the DIC brand and promote
digitization to improve efficiency.

The DIC Group participated in major
trade shows such as Tokyo Pack 2018,
FINETECH JAPAN and CHINAPLAS
2018. Private exhibitions were also
staged for customers.

★★★

Participate in trade shows for key customer industries in Japan and overseas tostrengthen the DIC brand and promote
digitization to improve efficiency.

| New Pillar Creation: Promoting New Businesses that Respond Accurately to the Changing Needs of Society
The DIC Group sees one of its key missions as being to achieve sustainable growth both for itself and society by helping to address social
imperatives related to climate change, the digitization of society, urbanization and longevity by identifying key business domains andproviding products that respond to such imperatives.
With the goal of swiftly realizing this mission, DIC has outlined two basic business development strategies in its new medium-term
management plan, DIC111: “Value Transformation” and “New Pillar Creation.” In line with the strategy of Value Transformation, the Groupwill advance qualitative reforms in existing core businesses by shifting to businesses with differentiated high-value-added products and withmore of a focus on social value. New Pillar Creation emphasizes creating new businesses by identifying areas where ESH-related issues andsocial changes intersect with the DIC Group’s competencies. This strategy continues to guide a number of key initiatives, several of which
are described on page 135.

| Designing a Framework for New Pillar Creation
7KH',&*URXS¶VVXFFHVVLQSURYLGLQJQHZSURGXFWVDQGVHUYLFHVWKDWEHQH¿WVRFLHW\DQGFUHDWLQJQHZ
Priority Areas of the New
Business Development
businesses will depend on how well it understands the sources of its competitiveness and whether it can
Headquarters
swiftly and accurately identify social imperatives and needs. The ability to take responsibility for seeing① Electronics
the development process through to commercialization is particularly crucial. Accordingly, rather than
② Automotive
depending on a conventional marketing-led approach to development, the Group has designed a framework③ Next-generation packaging
centered on a deployment team that is charged with facilitating the design of new businesses by overseeing④ Healthcare
everything from planning and development through to production and sales, thereby ensuring that efforts to(For details, see page 13.)
create new businesses optimize overall capabilities and are strategically effective.
+DYLQJHVWDEOLVKHGWKH1HZ%XVLQHVV'HYHORSPHQW+HDGTXDUWHUVWRVHUYHDVWKHGHSOR\PHQWWHDPDQGLGHQWL¿HGIRXUVHJPHQWVWKH',&
Group will leverage its ingenuity to advance the creation of new products that are useful to society and next-generation businesses with thepotential to become mainstays.
The DIC Group will also bring together people from technical and sales backgrounds with detailed understanding of the new segments andpeople with experience in related industries with the aim of enhancing expertise and communications capabilities, as well as make active useof open innovation—including through participation in initiatives involving collaboration between industrial concerns and academia and by
FDSLWDOL]LQJRQH[WHUQDOUHVRXUFHV²WRSURPRWHWKHWLPHO\GHYHORSPHQWDQGFRPPHUFLDOL]DWLRQRISURGXFWVWKDWEHQH¿WVRFLHW\

DIC Report 2019134

Business Models that Respond to Social Imperatives| Examples of New Pillar Creation
1

Leveraging Compounding Technologies to Develop Heat Management Materials: Contributing to Peace of Mind and Comfort in
the Electronics Field

While demand for ever-smaller and faster digital equipment continues to make lives
more convenient, heat management is increasingly critical to ensure the safetyof such devices. DIC is promoting the development of thermally conductive fillers
that quickly diffuse and dissipate heat by applying a proprietary technology that
VLPSOL¿HVWKHV\QWKHVLVRILQRUJDQLFR[LGHVLQJOHFU\VWDOVWRLPSURYHWKHFU\VWDOOLQLW\RILQRUJDQLF¿OOHUVDVZHOODVWRFRQWUROWKHLUVKDSHDQGVL]H:KHQXVHGLQPROGHG
plastic items, the characteristic shape and high crystallinity of particles in these
innovative fillers is expected to exhibit the high thermal conductivity inherent incrystals, further enhancing mechanical properties.

2

Newly developed specialized thermallyconductive fillers

Applying Composite Technologies to the Development of Environmental Sensors: Using Digital Transformation to Create Comfortable Environments

6PDUWEXLOGLQJVZKLFKPDNHXVHRIWHFKQRORJLHVWKDWRSWLPL]HRI¿FHEXLOGLQJV¶XVHRIHOHFWULFSRZHUWKHUHE\FRQWULEXWLQJWRGHFDUERQL]DWLRQand well buildings, which leverage technologies that improve the comfort and health of people are crucial to urban sustainability. DIC recently
developed a sensor for detecting internal temperature, humidity and light intensity in commercial complexes, office buildings and other
IDFLOLWLHVDQGLQIDOOEHJDQYHUL¿FDWLRQWHVWLQJLQFROODERUDWLRQZLWKVHYHUDORWKHUFRPSDQLHV8VLQJ',&*URXSFRPSRVLWHWHFKQRORJLHVHQDEOHG',&WRUHDOL]HDJURXQGEUHDNLQJZLUHOHVVHQYLURQPHQWDOVHQVRUZLWKDFDVLQJWKDWLVWKLQ PP OLJKW J VRIWDQGÀH[LEOHPDNLQJLWHDV\WRLQVWDOODQGUHPRYHLQDQ\ORFDWLRQ7KLVÀH[LEOHFDVLQJZDVPDGHSRVVLEOHE\WKHXVHRISunTronic TM conductive inks to printcircuits on sensor substrates.
The use of DIC’s DAITAC ® removable adhesive tape for mounting
the sensor facilitates installation and removal simply by sticking on andpeeling off.
Going forward, the DIC Group aims to supply sensors not only as
independent products but also as part of comprehensive packages that also
include other necessary equipment and services, thereby reinforcing its
ability to provide solutions that help respond to social imperatives.
Flexible printed substrate of DIC’s new wireless environmental sensor

3 TrinDy Compounds for 3D Printers: Combining Technologies to Bolster EfÀciency and Convenience in the Healthcare Field

With the number of elderly patients needing dental treatment rising, a shortage of dental technicians who construct custom-made dental
SURVWKHVLVKDVEHFRPHDFULWLFDOFRQFHUQ2QHIRFXVRIHIIRUWVWRDGGUHVVWKLVLVVXHKDVEHHQWRLPSURYHWKHHI¿FLHQF\RISURFHVVHVXVHGLQ
prosthesis construction, which has led to the increasing popularity of prosthesis created using 3D printing.
Because 3D printers can faithfully transform scanned data into 3D shapes, they are used widely inareas where high-precision molding is required. Combining its proprietary polymer and compounding
technologies, DIC succeeded in developing TrinDy™, a series of compounds for stereolithography —a form of 3D printing that cures with UV light—that achieve improved molding precision and strength.
DIC is currently expanding its lineup to include products for implant surgical guides and dental
impressions, among others, and is preparing to apply for approval under ISO 13485, the International
Organization for Standardization’s standard for quality management systems in the area of medical
devices, in line with its goal of providing products that respond effectively to structural changes in
3D-printed dental prosthesis made with TrinDy™
society attributable to digitization.

DIC Report 2019135

Business Models that Respond to Social Imperatives| Encouraging Familiarity with DIC Group Materials
The DIC Group participates in a variety of major trade shows every year with the aim of encouraging familiarity with DIC Group products
DQGGHYHORSPHQWHIIRUWV,Q¿VFDO\HDUWKH*URXSLQWURGXFHGPDWHULDOVWKDWZLOOFRQWULEXWHWRDVWUHVVIUHHGLJLWDOVRFLHW\DW),1(7(&+JAPAN (Makuhari, Chiba Prefecture), the JPCA Show (Tokyo Big Sight) and Chemical Materials Japan (Yokohama, Kanagawa Prefecture),materials relevant to the issue of marine plastics at Tokyo Pack 2018 (Tokyo Big Sight) and health- and safety-related products at FOOD
TABLE in Japan 2018 (Makuhari, Chiba Prefecture). Overseas, the Group exhibited plastic materials that help reduce the weight of vehicles
at PLASTINDIA 2018 (Gandhinagar, Gujarat) and CHINAPLAS 2018 (Shanghai) and took part inDYDULHW\RIVHJPHQWVSHFL¿FHYHQWVLQFOXGLQJ3DLQW,QGLD 0XPEDL 6HFXULW\3ULQWHUV
(Dublin, Ireland) and in-Cosmetics Global 2018 (Amsterdam), to promote dialogue with a wide
range of stakeholders.
,Q¿VFDO\HDUWKH',&*URXSZLOODJDLQWDNHSDUWLQNH\WUDGHVKRZVWRLQWURGXFH*URXS
products, development efforts and core technologies and hear the views of stakeholders, with theaim of realizing distinctively DIC materials that resolve challenges and are useful to society.
FINETECH JAPAN booth

VOICE We are working to create next-generation businesses that will ensure a sustainable future for everyone.
In formulating our new medium-term management plan, DIC111, we held extensive discussions on how to best incorporate sustainability, represented
by the SDGs, into the creation of next-generation businesses. One conclusion this process yielded was that there was a need for another scale—
namely, sustainability indicators—for assessing businesses. That prompted us to revisit the question of who “sustainability” is for.
Our goal is not to promote sustainability exclusively for customers, nor is it only a way for us to fulfill our responsibility as a corporate citizen.
Rather, we must seek to ensure a sustainable future for everyone—the DIC Group, including the employees engaged in production, the customers
who use our products, and also society, to which our products ultimately contribute. This belief will continue to guide our efforts to create nextgeneration businesses.
Manager, New Business Development Headquarters, DIC Corporation Nobuo Kobayashi

DIC Report 2019136

New Technology Development and Value Creation

SDGs Goals 9 and 12

Proposing Solutions that Leverage Elemental Technologies

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2018

Achievements in fiscal year 2018

Enhance ability to develop products
and technologies that facilitatecontribution to a sustainable society.

• Promote collaboration among DIC Grouptechnical departments.
• Strengthen global technological development.
• Make use of open innovation and AI tohasten R&D.

• The Pigment Technical Center Asia
Pacific was established in Indonesia,
completing a network of facilities thatcollaborate to promote R&D.
• The effective use of AI helped accelerate
the development of resin for thick-layer
resists and other new products.

Promote the development ofenvironment-friendly products
and services.

Accelerate efforts to develop low-carbon
and other products that reduce negative
impact on the environment.

• Efforts led to the expansion of DIC’s lineupof biomass-derived gravure inks, packaging
materials and other products.
• Environment-friendly products accounted
for 57.0% of overall product sales.

Evaluation

Goals for fiscal year 2019★★

• Accelerate collaboration among global
technology bases in the development ofstrategic products and new technologies.
• Make use of compounding technologies,
open innovation and AI to hasten thedevelopment of technologies that create
added value.

★★

• Accelerate efforts to develop productsthat contribute to sustainability.

| 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 areas of optics and color, organic molecular design, polymer design and dispersion, as well as its core technologies
in such areas as synthesis, compounding and formulation, and surface treatment, to develop high-value-added products that contribute toa sustainable society. The Group is also building a portfolio of next-generation products and new technologies by integrating technologicalresources originating across the Group, as well as actively promoting open innovation, to drive sustainable growth.

Development of New Technologies, Products and Solutions
to Support Business Portfolio Transformation
Segment
Value
Transformation

Core Technologies
Polymer synthesis

Crystallization

Organic
molecular
designColoring
Opticsand color

Adhesion
Molding

Resin curing
Polymer
designLiquid/liquid dispersion

Basic
Technologies

Dispersion

Applicability
assessment(Coating/printing/molding)

Film formation

Compounding formulation

Solid/liquid dispersion
Rheology

Composite
technology
×Open innovation
×Thorough use ofIT (AI, MI)

Surface treatment

Creating and Adding Depth to Basic Technologies
Development of sustainable technologies and high-performance materials

DIC Report 2019137

Packaging &Graphic

Next-generation packaging inks and coatings,
functional packaging adhesives,
industrial-use jet inks, others

Color &
Display

Pigments for color filters, pigments for cosmetics,
effect pigments, natural colorants, LC materials,
next-generation display materials, others

Functional
Products

Sustainable polymers, environment-friendly PPS
compounds for automotive components,
high-performance industrial adhesive tapes, others

Business Area

New Pillar
Creation

Organic synthesis

TargetTargetElectronics

Technologies and functional materials that support
the spread of digitization

Automotive

Technologies and functional materials that underpin
efforts to transform the automotive industry

Next-Generation
Packaging

Packaging materials that help reduce food loss
and support sustainability

Healthcare

Microorganism and cell culture technologies
with applications extending from food safety toadvanced medical care

New Technology Development and Value Creation| SpeciÀc Initiatives and Achievements
The 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.
Products for Use in Electronics Equipment,QSURGXFWVIRU/&'VWKH',&*URXSLVZRUNLQJWRHQKDQFHWKHOXPLQRXVLQWHQVLW\RILWVSLJPHQWVIRUFRORU¿OWHUV7KH*URXSLVDOVRSURPRWLQJWKHGHYHORSPHQWRID
highly responsive monomer that shortens production processes for polymer sustained alignment (PSA) LCs; nanophase-separated (NPS) LCs, which are effectivein improving display response speeds; and LCs that spontaneously adopt homeotropic alignment, eliminating the need for a polyimide alignment layer. In the areaof double-sided industrial adhesive tapes, a new tape that can be pulled off surfaces, thereby facilitating dismantling, continued to earn high marks for use in the
securing of components for large displays for both its outstanding adhesion and ease of removal. In next-generation display materials, DIC continued to promote
GHYHORSPHQWRILQNVIRUXVHLQWKHSURGXFWLRQRILQNMHWSULQWHGTXDQWXPGRWFRORU¿OWHUV 4'&)V IRUGLVSOD\VLQFROODERUDWLRQZLWK1DQRV\V,QFRIWKH8QLWHG6WDWHVIn products for use in electronics materials, the Group developed an active ester curing agent for use in semiconductor encapsulation materials and a resin for thicklayer resists for semiconductor packages, both of which boast outstanding heat resistance. The resin for thick-layer resists boasts a rigid skeleton that leverages DIC’s
SURSULHWDU\SRO\PHUGHVLJQWHFKQRORJLHVDQG$,WRUHDOL]HERWKKLJKKHDWUHVLVWDQFHDQGÀH[LELOLW\,QSURGXFWVIRUSULQWHGHOHFWURQLFV±UHODWHGDSSOLFDWLRQVWKH*URXS
is focusing on the development of highly electroconductive silver inks and copper nanopastes, among others.
Products for Packaging & Graphics Applications,QWKHDUHDRIJUDYXUHLQNVWKH*URXSGHYHORSHGDELRPDVVLQNIRUODPLQDWHGSDFNDJLQJDSSOLFDWLRQVIRUZKLFKLWREWDLQHG%LRPDVV0DUNFHUWL¿FDWLRQIURPWKH-DSDQ2UJDQLF
Recycling Association. The Group also developed a Biomass Mark–certified packaging adhesive, further expanding its lineup of biomass products. In addition, the Grouplaunched a number of new environment-friendly products, including a water-based water- and oil-resistant coating for the inner surfaces of paper and paperboard food packaging,
DZDWHUEDVHGÀH[RLQNIRUKLJKUHVROXWLRQSULQWLQJRQERLODEOHDQGUHWRUWDEOHIRRGSDFNDJLQJDQGKLJKVHQVLWLYLW\89FXUDEOHLQNVIRUDYDULHW\RIDSSOLFDWLRQV,QPXOWLOD\HU¿OPV
WKH*URXSFRQWLQXHVWREROVWHULWVUHVXOWVLQWKHPDUNHWVIRUWUDQVSDUHQWDQGPDWWH¿OPVIRUSDFNDJHGEUHDGSURGXFWVDQGHDV\SHHO¿OPVIRUSUHSDUHGIRRGVVROGDWIRUH[DPSOH
FRQYHQLHQFHVWRUHV2YHUVHDVWKH6XQ&KHPLFDO*URXSLVVWHSSLQJXSLWVHIIRUWVWRGHYHORSUHF\FODEOHSDFNDJLQJPDWHULDOVDQGEURXJKWDQXPEHURIQHZSURGXFWVWRPDUNHWDQG
is working to expand its new series of water-based inks made with vegetable oil. The company also launched a line of pigmented inks for textile inkjet printing.

| A Global R&D ConÀguration that Underpins Product Development
The Technical Management Unit, R&D Management Unit and New Business Development Headquarters in Japan collaborate with the R&D components of DIC Group
companies around the world. These include DIC Graphics; the Sun Chemical Group’s research centers in the United States, the United Kingdom and Germany; and4LQJGDR',&)LQHFKHPLFDOVZKLFKFRQGXFWVFRPSUHKHQVLYH5 'WDLORUHGWRPDUNHWQHHGVLQWKH35&6LQFH¿VFDO\HDUWKH*URXSKDVDOVRHVWDEOLVKHGSULQWLQJLQNVWHFKQLFDOFHQWHUVSRO\PHUWHFKQLFDOFHQWHUVVROLGFRPSRXQGWHFKQLFDOFHQWHUVDQGSLJPHQWWHFKQLFDOFHQWHUVLQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQDQGWKH
Fine Chemical Technical Center–Korea. 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, encompassing everything from cultivation through to practical application.

| Promoting Environment-Friendly Products
7KH',&*URXSLVFRPPLWWHGWRHIIHFWLYHVWHZDUGVKLSRIWKHSURGXFWVLWSURYLGHV )RUGHWDLOVSOHDVHVHHSDJHVDQG &RQVFLRXVDOZD\VRIWKHLPSRUWDQFHRIHQVXULQJLWV
products are environment-friendly, DIC promotes the development of products and new technologies that are useful to society and works to increase the weighting of environmentfriendly products in its portfolio, by reducing the volume of hazardous substances it uses, focusing on products that are less hazardous and products that facilitate recycling, andrealizing safer production processes that generate less waste and use less energy. The Group has established internal rules for designating products “environment-friendly” and works
to increase the weighting of products that have earned this designation in their portfolio.
Evaluation Sheet for Environment-Friendly Products,Q¿VFDO\HDUHQYLURQPHQWIULHQGO\SURGXFWVDFFRXQWHGIRURIDOOSURGXFWVDepartment:
Prepared by:
Prepared on:
put out by DIC and subsidiary DIC Graphics. The Group also strives to maintain a solid
Product to be Evaluated:
Evaluation
grasp of laws and regulations in different countries and territories, and of trends in
Description
Certifying Standards
Item
Energyenvironmental measures—thereby ensuring its ability to design products that comply with
Reduction of energy inConsumption
production, transportation, etc.
diverse regulations governing the use of chemical substances in different markets—and
Reduction of use of nonMaterials to
renewable materials, nonconducts environmental assessments on a continuous basis.
be Usedrecyclable materials, etc.
For printing inks, adhesives and other products used in food packaging, which theHazards
Product with lower toxicity, etc.
Group supplies to customers around the world, the DIC Group has established a global
Amount ofReduction of environmentally
Waste
product stewardship team. The team shares information on regulations and relevant
concerned substances, etc.
Generated
topics from different markets, as well as promotes awareness thereof and provides
Remarks:
Evaluator
education. Knowledge thus gained is incorporated into product design and used to
produce compliance certificates across the supply chain, which are essential for
DIC introducedi t dd a systemtffor ddesignatingiti environment-friendlyit f i dl products
d t andd uses a proprietaryi tcustomers worldwide.
sheet to evaluate products based on energy consumption, materials to be used, hazards and waste
Average offgenerated, as well as to conduct life cycle assessments.

DIC Report 2019138

Coefficient

Subtotal

New Technology Development and Value Creation

Introducing the DIC Sustainability Index
To ensure that stakeholders understand the true worth of DIC Group products and solutions that address social imperatives, in addition to
being environment-friendly, the Group introduced a proprietary sustainability index. The Group aims to begin using the DIC Sustainability,QGH[LQ¿VFDO\HDU

Products that Contribute to the Realization of Clean Technologies
The DIC Group develops materials that contribute to the realization of clean technologies designed to help resolve critical global
environmental issues. Product divisions promote the development of clean technology–related products for individual target markets that
OHYHUDJHGLVWLQFWLYH',&FDSDELOLWLHV2YHUDOODQQXDOVDOHVRIVXFKSURGXFWVFXUUHQWO\DPRXQWWRDSSUR[LPDWHO\ELOOLRQ7KH',&*URXSLVFRQVFLRXVRIWKHQHHGWRSURPRWHWKH³5V´ ³5HGXFH5HXVH5HF\FOH´ IRUUHVRXUFHV7KH*URXSLVZRUNLQJWRKHOS
reduce materials used by its customers in such areas as plasticizers, adhesives and adhesive tapes, by making products thinner while
maintaining strength. To promote recycling, the Group is developing and launching products with recyclable constituent substances andadvancing businesses that encourage recycling. The Group is also taking active steps to help reduce waste plastics and marine plastics,
UHFRJQL]LQJWKHVHDVFKDOOHQJHVWKDWDVDPDQXIDFWXUHURI¿QHFKHPLFDOVLWKDVDUHVSRQVLELOLW\WRDGGUHVV| Innovation through Compounding
Building on its fundamental pigment and resin dispersion and formulating technologies, realized through the production of printing inks, DIC
has succeeded in combining materials with different properties and performance characteristics to develop groundbreaking products andcreate new value. Recent achievements in the area of PPS compounds include the development of new products for motor components and
IXQFWLRQDOFRPSRQHQWVXVHGLQHOHFWULFYHKLFOHV (9V DVZHOODVWKHH[SDQVLRQRIWKH',&*URXS¶VOLQHXSRIKLJKO\KHDWFROGDQGLPSDFWUHVLVWDQWKLJKÀRZLPSDFWDQGFROGUHVLVWDQWDQGRWKHUJUDGHVIRUXVHLQDXWRPRWLYHFRPSRQHQWV,QWKHDUHDRILQQRYDWLYHSURGXFWVWKH
&RPSDQ\FRPPHQFHGIXOOVFDOH5 'LQWKHDUHDRIFRPSRXQGVIRUXVHLQVWHUHROLWKRJUDSK\'SULQWLQJDQGZLOODOVRFXOWLYDWHDSSOLFDWLRQV
in such areas as dental and industrial equipment. The Group will continue to harness its distinctive compounding capabilities to transform its
diverse technologies into competitive advantages with the aim of driving innovation.

| Protecting Intellectual Property
Recognizing intellectual property as crucial to competitiveness, the DIC Group vows to respect the intellectual property of other companies.
At the same time, guided by an open/closed strategy the Group works to secure intellectual property rights for its own technologies and makeuse of “black boxing.”
',&¶VHIIRUWVWRUHLQIRUFHSURWHFWLRQRILWVLQWHOOHFWXDOSURSHUW\DUHDOVRDWWUDFWLQJQRWLFHRXWVLGHRIWKH&RPSDQ\)RUH[DPSOHLQ¿VFDO\HDU',&ZDVVHFRQGLQDUDQNLQJRIFRPSDQLHVLQWKHFKHPLFDOVLQGXVWU\LQ-DSDQLQWHUPVRISDWHQWDVVHWVRZQHGFRQGXFWHGE\
DQLQGHSHQGHQW¿UP ',&UHJLVWHUVDQDYHUDJHRIQHZSDWHQWVDQQXDOO\:KLOHWKLVLVVPDOOFRPSDUHGWROHDGLQJFKHPLFDOV¿UPVWKH
&RPSDQ\UHFHLYHGDKLJKVFRUHIRUWKHRYHUDOOVFDOHRILWVSDWHQWDVVHWVUHÀHFWLQJWKHTXDOLW\DQGKLJKSUR¿OHRIWKHSDWHQWVLWKROGV',&ZLOO
continue to actively protect its intellectual property portfolio with the aim of ensuring sustainable growth in the years ahead.

VOICE We are promoting the development of waterborne polyurethane resins that willcontribute to the success of the SDGs.

Amid rising environmental concerns, including climate change, and increasingly urgent social imperatives, companies today face an ever-morediverse array of challenges. DIC is working to develop products that take into account the global environment, ecosystems, socioeconomic
V\VWHPVDQGRWKHUIDFWRUVZLWKWKHDLPRIFRQWULEXWLQJWRVXVWDLQDELOLW\2XUJURXSIRFXVHVRQSRO\XUHWKDQHUHVLQVWKDWLPSDUWERWKWH[WXUHDQG
GXUDELOLW\WRVROYHQWEDVHGDUWL¿FLDODQGV\QWKHWLFOHDWKHUVXVHGLQDXWRPRWLYHLQWHULRUVIXUQLWXUHDQGFORWKLQJZKLFK',&VXSSOLHVWRFXVWRPHUVDURXQGWKHZRUOG:HDUHDOVRFRQWULEXWLQJWRWKHFLUFXODUHFRQRP\E\GHYHORSLQJSURGXFWLRQSURFHVVHVWKDWDFKLHYHVLJQL¿FDQWO\LPSURYHG
HI¿FLHQF\DQGDGRSWLQJELRGHULYHGUDZPDWHULDOVAssistant Manager, Polymer Technical Group 6, Polymer Technical Division 2, DIC Corporation

DIC Report 2019139

Tomohiro Tetsui

Harmony with the Community and Social Contributions

SDGs

Goals 3 and 4

Adding Color & Comfort to Lifestyle

Basic Approach to Social Contribution
Based on its Guidelines for Social Contribution Activities, established in fiscal year 2009, the DIC Group works to ensureharmony with local communities and individuals through activities aimed at building a strong relationship with society.

The DIC Group’s Guidelines for Social Contribution Activities
In line with its Color & Comfort by Chemistry management vision, the DIC Group will promote social contribution initiatives inthree areas: Business activities, culture and education, and communities and society.

Business activities
The DIC Group will offer products and services that contribute to the development of a sustainable society and protection of
the global environment from the viewpoint of “CSR through business activities.”

Culture and education
The DIC Group will engage in activities that will contribute to the development and promotion of culture, the arts, science andeducation, including fostering next-generation human resources in areas such as the culture of color and chemistry.

Communities and society
The DIC Group will strive to coexist harmoniously with local communities to develop a relationship of mutual trust. Moreover, the Group will
provide an environment that enables employees to engage in voluntary contribution activities in their respective local communities.

| Examples of Recent Initiatives
Publication of the Guidebook for the Color Universal Design–Recommended Color Set
The DIC Group is actively involved in R&D in the area of color universal design (CUD), as well as in expanding public awareness and understanding of CUD’s importance. In
2007, the Group, in cooperation with the Japan Paint Manufacturers Association, the Industrial Research Institute of Ishikawa and the Color Universal Design Organization,
embarked on a project to create the Color Universal Design–Recommended Color Set under the supervision of the University of Tokyo. In developing the color set, theRUJDQL]DWLRQVFRQGXFWHGUHSHDWHGYHUL¿FDWLRQWHVWVXVLQJVWXG\SDUWLFLSDQWVZLWKYDULRXVW\SHVRIFRORUYLVLRQWRDGMXVWSURSRVHGFRORUVDSURFHVVWKDWIDFLOLWDWHGWKHFUHDWLRQRID
set of colors that are relatively easy to distinguish regardless of ability to see colors and can be reproduced using printing inks, coatings and digital imaging. Taking into account
QHDUO\DGHFDGHRIXVHLQ¿VFDO\HDUWKHSURMHFWPHPEHUVUHYLVHGWKHVHW¶VFRORUYDOXHVWRIXUWKHUHQKDQFHXVDELOLW\7KHRUJDQL]DWLRQVDOVRSXEOLVKHGDJXLGHERRNRQ
effective use of the set and has worked to promote understanding and awareness.
)URP¿VFDO\HDUWKURXJK¿VFDO\HDUWKH',&*URXSSDUWLFLSDWHGLQDMRLQWLQGXVWU\±DFDGHPLFUHVHDUFKSURMHFW'XULQJWKLVSHULRG&KLED8QLYHUVLW\WKH&HQWUDO
Research Laboratories and DIC Color Design, Inc., gave presentations on issues to consider in printing warnings and other important information on packaging and the results ofjoint research on the color appearance of red spot colors and on the use of color in an aging society at academic conferences in Japan and overseas.
,Q',&EHJDQFROODERUDWLQJZLWKWKH8QLYHUVLW\RI7RN\RDQGDUFKLWHFW.HQJR.XPDWRGHYHORSQHZWDFWLOHSDYLQJWKDWHQVXUHVKLJKYLVLELOLW\IRUYLVXDOO\LPSDLUHGLQGLYLGXDOVDQGLVLQKDUPRQ\ZLWKWKHODQGVFDSH,Q¿VFDO\HDUWZRQHZFRORURSWLRQV DZDUPRUDQJH\\HOORZDQGDFRRO\HOORZLVKJUHHQ ZHUHLQWURGXFHGIRUWKHQHZSDYLQJ,QDQRWKHUNH\LQLWLDWLYHLQ¿VFDO\HDU',&SDUWLFLSDWHGLQWKHSURMHFWWRUHYLVHWKH-DSDQ,QGXVWULDO6WDQGDUGV -,6 VWDQGDUGIRUVDIHW\FRORUV -,6= ZLWKWKHJRDORI
choosing colors that can be distinguished by people with diverse color vision.
Used increasingly in signage and infrastructure, CUD is playing an important role in everyday life. The broader application of CUD is also expected to increase safety andconvenience for visitors to Japan and individuals with diverse color vision in advance of the Tokyo 2020 Olympic and Paralympic Games.
Looking ahead, DIC will continue to promote a variety of research initiatives that contribute to society and add color to lifestyles.
Comparison of Selected Colors

Beforerevision

Press conference
introducing the newtactile paving

Afterrevision

JIS safety colors before and after revision of the standard

DIC Report 2019140

Harmony with the Community and Social Contributions

Visiting Science Lab Program
In line with the Japanese government’s efforts to promote career education initiatives, aswell 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,the Group seeks to spark children’s interest in science and encourage them to realize theclose relationship between science and their everyday lives. Since launching this initiative inWKHWZRFRPSDQLHVKDYHFRQGXFWHGYLVLWLQJVFLHQFHODEVDWHOHPHQWDU\VFKRROVIRU
DSSUR[LPDWHO\VL[WKJUDGHUV,Q¿VFDO\HDU',&DQG',&*UDSKLFVDOVRFRQGXFWHGYLVLWLQJVFLHQFHODEVDVSDUWRI
the Tohoku University Graduate School of Engineering’s Science Campus project, at Tokyo
University of the Arts and at DIC Family Day, an event held for the families of employees.
7KHYLVLWLQJVFLHQFHODEVSURJUDPZRQVLOYHULQWKH(GXFDWLRQ6XSSRUW*UDQG3UL[sponsored by Tokyo-based Leave a Nest Co., Ltd. The Education Support Grand Prix is the
only awards program in Japan that evaluates and recognizes the educational initiatives ofcompanies committed to helping children thrive from both a business and an educational
perspective. The jury gave high marks to the program’s use of know-how and technologies
unique to the DIC Group to help participants experience the fun and fascination of science¿UVWKDQGDVZHOODVWRWKHIDFWWKDWWKHSURJUDPLVRIIHUHGQRWRQO\DWHOHPHQWDU\VFKRROV
near Group sites but also at universities and events for employees’ families. DIC pledges tocontinue offering this program in the years ahead.

Visiting science lab',&¶V(GXFDWLRQ6XSSRUW*UDQG3UL[award certificate

As part of the Graduate School of Chemical Engineering, this is what I see as the importance ofComment social contribution initiatives for children by B-to-B companies.

In primary school science education, we believe it is important to create an environment that brings out and broadens children’s interests.
However, in today’s information-intensive world people tend to be primarily interested in products and advertisements around them. I am on
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¿QDOSURGXFWWKH\VHHDURXQGWKHP²DVHQWLPHQWVKDUHGE\WKHLUSDUHQWV7KHUHDUHPDQ\%WR%FRPSDQLHVLQDUHDVVXFKDVPDWHULDOVDQG
LQWHUPHGLDWHSURGXFWVPDQXIDFWXULQJZKHUHVWXGHQWVZKRKDYHVWXGLHGPDWHULDOVVFLHQFHFDQH[HUFLVHWKHLUFDSDELOLWLHVEXWLWFDQEHGLI¿FXOWWR
understand what such companies do.
I see the Tohoku University Science Campus project as important for children because it helps communicate the importance of B-to-B companies to parents who participate
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in science and contribute to the future of science and technology in Japan by ensuring the well-balanced allocation of human resources.
Director, Center for Creative Engineering; Professor, Graduate School of Engineering, Tohoku University

Initiatives Led by the Central Research Laboratories
The Central Research Laboratories offer a variety of programs in such uniquely DIC topics
DVV\QWKHVLVDQGFKURPDWLFVWRWKHVWXGHQWVRIORFDOVFKRROV,Q-DQXDU\VWXGHQWVIURP&KLED3UHIHFWXUDO6DNXUD+LJK6FKRRO²D6XSHU6FLHQFH+LJK6FKRRO ²ZHUHJLYHQWKH
opportunity to take part in a visiting lab lesson conducted by staff of the Central ResearchLaboratories on the theme of the role of intellectual property rights in corporate management.
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part of a visiting lab lesson for primary school children in Chiba Prefecture as part of the
Chiba Prefectural Education Agency’s Dream Challenge Hands-On School. In addition toexperiments, time was allocated for the young employees who served as instructors to talkabout how they became interested in science and the challenges and rewards of research. At
the same time as it helps children enjoy science, this program thus enables young employees
to contribute to career education.
$GHVLJQDWLRQDZDUGHGE\-DSDQ¶V0LQLVWU\RI(GXFDWLRQ&XOWXUH6SRUWV6FLHQFHDQG7HFKQRORJ\ 0(;7 WRVHQLRUKLJKVFKRROVWKDWLPSOHPHQWFXUULFXODIRFXVHGRQWKHVFLHQFHVDQGPDWKHPDWLFVWKDWJRHVEH\RQGWKH0LQLVWU\¶VRI¿FLDOJXLGHOLQHVZLWKWKHDLP
of fostering the next generation of talented engineers and scientists.

DIC Report 2019141

Lab lesson at a Super Science High School

Hideyuki Aoki

Harmony with the Community and Social Contributions

Initiatives at the Kashima Plant,Q'HFHPEHUWKH.DVKLPD3ODQWFROODERUDWHGZLWKIRXUFRPSDQLHVEDVHGLQWKH.DVKLPDDUHDRI,EDUDNL3UHIHFWXUHWRFRQGXFWDODE
lesson at Seishin Gakuen High School, a Super Science High School. Titled “Learning about the colors around us,” the lab lesson explained,
among others, the properties of color and light, products that capitalize on those properties, color names, primary colors and the synthesis of
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Plant will continue to explore ways to work with other nearby companies to conduct lab lessons in the future with the goal of communicating thefascination and appeal of science to junior and senior high school students with the hope that more may consider a future in science.

Kawamura Memorial DIC Museum of Art
7KH.DZDPXUD0HPRULDO',&0XVHXPRI$UWORFDWHGDGMDFHQWWRWKH&HQWUDO5HVHDUFK/DERUDWRULHVLQ6DNXUD&KLED3UHIHFWXUHZDVHVWDEOLVKHG
LQWRSXEOLFO\H[KLELWZRUNVRIDUWFROOHFWHGE\',&&RUSRUDWLRQDQGLWVDI¿OLDWHV,QWKHPXVHXPLVFHOHEUDWLQJLWVWKDQQLYHUVDU\$VRI'HFHPEHUFXPXODWLYHYLVLWRUVWRWKHPXVHXPKDGVXUSDVVHGPLOOLRQ',&YLHZVRSHUDWLRQRIWKHPXVHXPZKLFKDVVXPHGLWVFXUUHQWQDPH
LQDVDVRFLDOFRQWULEXWLRQLQLWLDWLYHWKDWWKH',&*URXSLVXQLTXHO\SRVLWLRQHGWRXQGHUWDNHDVDQRUJDQL]DWLRQLQWULQVLFDOO\LQYROYHGLQFRORUThe 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-20 century$PHULFDQDUWLQFOXGLQJ0DUN5RWKNR&\7ZRPEO\DQG)UDQN6WHOOD,QDGGLWLRQWRDVWDQGLQJH[KLELWIURPLWVSHUPDQHQWFROOHFWLRQRIPRUHWKDQ
major works, the museum stages special exhibitions several times a year that focus on pertinent literary works and other artifacts that evoke thecultural atmosphere at the time works were created to help visitors better understand the collection. The museum also offers free-of-charge guided
tours every afternoon beginning at 2:00 pm.
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PXVHXP¶VHVWDEOLVKPHQW$WRWDORIFKHUU\WUHHV²YDULHWLHVLQWRWDO²EORVVRPHYHU\VSULQJZKLOHLQVXPPHUZLOGÀRZHUVRIDOOFRORUVFRYHUWKH
VLWH2WKHUKLJKOLJKWVLQFOXGHWKHORWXVSRQGDWWKHEDFNRIWKHJDUGHQZKLFKZDVH[SDQGHGLQDQGWKHZRRGHGQDWXUHWUDLOWKDWWUDYHUVHVWKHVLWH,QDPRYHDLPHGDWSURPRWLQJUHODWLRQVZLWKWKHORFDOFRPPXQLW\DQGIRVWHULQJORFDOFXOWXUDODFWLYLWLHVWKH.DZDPXUD0HPRULDO',&0XVHXPRIArt has established an annex gallery on the museum site that serves as an exhibition space for local amateur artists and is also made available toelementary and junior and senior high schools in the Sakura area for an exhibition of local students’ works.
7KHPXVHXPZDVDOVRWKH¿UVWLQ-DSDQWRLQWURGXFHLQWHUDFWLYHPHWKRGVRULJLQDWHGE\WKH0XVHXPRI0RGHUQ$UWLQ1HZ<RUNIRUWHDFKLQJFKLOGUHQDERXWDUW7RGDWHDWRWDORIVFKRROVDQGPRUHWKDQFKLOGUHQKDYHWDNHQSDUWLQWKHPXVHXP¶VHGXFDWLRQDOSURJUDPVZKLFKDUHRIIHUHGWRHQWLUHFODVVHVOHGE\HOHPHQWDU\RUMXQLRUKLJKVFKRROWHDFKHUV7KLVSURJUDPKDVEHHQFHUWL¿HGHYHU\\HDUVLQFHLWVHVWDEOLVKPHQWE\WKH$VVRFLDWLRQfor Corporate Support for Arts under its This is MECENAT program.

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Museum entrance hallOutdoor terrace

DIC Report 2019142

Harmony with the Community and Social Contributions

Sustainability Initiatives at Siam Chemical Industry,Q¿VFDO\HDU',&*URXSFRPSDQ\6LDP&KHPLFDO,QGXVWU\&R/WGZDVRQFHDJDLQSUHVHQWHGZLWKD&65',:$ZDUGE\WKH7KDL0LQLVWU\RI,QGXVWU\WKHVHYHQWKFRQVHFXWLYH\HDULWKDVEHHQVRKRQRUHG7KH&65',:$ZDUGSURJUDPZDVHVWDEOLVKHGLQZLWKWKHJRDORIUDLVLQJWKHJOREDO
competitiveness of Thai companies. Awards are given annually to companies in recognition of CSR (sustainability) initiatives judged as exceptional from
WKHSHUVSHFWLYHRIVHYHQFRUHVXEMHFWVGH¿QHGLQ,62WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ¶VVWDQGDUGIRUVRFLDOUHVSRQVLELOLW\6LDP&KHPLFDO,QGXVWU\¶V&65SURJUDPLQ¿VFDO\HDULQFOXGHGFRVSRQVRULQJDYROXQWHHULQLWLDWLYHLQ6DPXW6DNKRQ3URYLQFHWRSDLQWWKHH[WHULRU
and replace the roof and toilets of a school for the children of migrant laborers from Myanmar that is located within a Buddhist temple. The initiative wasorganized under the auspices of Tokon International, an organization of painters that does volunteer work around the world. Siam Chemical Industry’s
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enthusiastically to the festival and participating employees praised the initiative, with one commenting that taking part had given them a renewed senseof pride in their company.
2WKHUVXVWDLQDELOLW\LQLWLDWLYHVE\6LDP&KHPLFDO,QGXVWU\LQ¿VFDO\HDULQFOXGHGWKHLQVWDOODWLRQRIQHZVRODUSDQHOV$VDUHVXOWVRODUSRZHUDFFRXQWHGIRURIWKHHOHFWULFSRZHUXVHGE\WKHFRPSDQ\ORZHULQJLWVDQQXDO&22HPLVVLRQVE\PHWULFWRQQHV6LDP&KHPLFDO,QGXVWU\ZLOO
continue to promote forward-looking efforts with the aim of contributing to the realization of a sustainable society.

Volunteer school painting initiative

Matching Gift Program
DIC has a matching gift program whereby it matches the total amount collected throughan annual year-end fundraising drive spearheaded by its employees’ union. Funds raised
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facilities providing support for disabled individuals.

DIC Report 2019143

Communication with Stakeholders

SDGs Goal 17

Promoting Disclosure and Communication

Promoting Disclosure and Communication
The DIC Group places a priority on communication with its stakeholders worldwide, as outlined in Article 7 of its Policy on Corporate Governance.

Article 7 (Ensuring Appropriate Information Disclosure and Transparency)
The Company shall ensure transparency and fairness; and in order to gain the correct understanding and trust fromstakeholders, 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.
Guided by this policy, the DIC Group promotes communication with stakeholders through television advertisements, participationin exhibitions, websites and events. By communicating effectively with stakeholders, the Group strives to ensure an adequate
understanding of stakeholder expectations and to reflect such expectations in its business activities. The Group is also expanding its
awareness of the concept of stakeholder engagement, a key requirement under ISO 26000.

Ties withshareholders
and investors

Ties withbusiness
partners

Ties with society

Ties with employees

Ties with the media

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

Ensure appropriate
disclosure and build
trusting relationships withshareholders and investors,
encouraging both toevaluate DIC as an attractive
investment.

Promote socially responsible
procurement across the
supply chain and build solid
relationships that will facilitatesustainable procurement.

Operate in harmony withthe community and build
positive relationships withlocal residents that will
underpin the long-termsustainability of 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● Product pamphlets● Digital marketing● Corporate profile DVDs
● DIC Report● Corporate PR film
● News releases● Television advertisements● Websites● Press conferences● Quarterly results● DIC Group CSR Procurement● DIC Plaza● Press conferences● Interviews with

●Yuka Shoken Hokokusho● Supplier CSR self-evaluation● Websites● Site reports● &RUSRUDWHSUR¿OH'9'V● DIC Report● News releases● Television advertisements● Production facility tours● Participation in projects involving● Labor–management councils● Results presentations

Ties with customers

Basic approach

Communications
tools

announcements(¿QDQFLDOGLVFORVXUHGRFXPHQWUHTXLUHG
of listed companies in Japan)● Timely disclosure● Notice of Convocation of WKH$QQXDO*HQHUDO0HHWLQJ
of Shareholders● Shareholder newsletters● &RUSRUDWHSUR¿OH'9'V

Guidelines● DIC Group Green Procurement

Guidelines

questionnaires● Feedback sheets● &RQÀLFW0LQHUDOV5HSRUWLQJ

Template(in-house newsletter)● Intranet● DIC Pocket Book LQKRXVH*URXSGDWD¿OH ● DIC Report● Corporate PR film
● News releases● Television
advertisements● Global linkage● Branding questionnaire

journalists● DIC Report● News releases● Television

advertisements● DIC Report● News releases● Television advertisements● Sales activities● Participation in

Opportunities forcommunication

exhibitions● General shareholders’meetings● Results presentations● IR conferences● IR meetings● DIC IR Day● On-site inquiries

collaboration among industrial
concerns, government bodies andacademic institutions● Participation in community events● Environmental monitoring

DIC Report 2019144

for employees● Presentations on the DIC Group

Code of Business Conduct● Sustainability presentations● DIC Family Day● Plant tours for employee families● Newspapers● Economic publications● Industry publications

Communication with Stakeholders| Ties with Customers
Guided by the basic policy of its previous medium-term management plan, which emphasized the focused allocation of management resources
LQNH\EXVLQHVVGRPDLQVLQ¿VFDO\HDUWKH',&*URXSWRRNSDUWLQQXPHURXVWUDGHVKRZVLQ-DSDQDQGRYHUVHDV6XFKHYHQWVSURYLGHGYDOXDEOHRSSRUWXQLWLHVIRUWKH*URXSWRFRPPXQLFDWHZLWKLWVFXVWRPHUV,Q-DSDQWKH*URXSSDUWLFLSDWHGLQ&KHPLFDO0DWHULDOV-DSDQLQ
0D\ZKHUHLWGLVSOD\HGVKHHWIRUPSDVVLYHKHDWVWRUDJHPDWHULDODQGRWKHUDGYDQFHGWHFKQRORJLHVDQGLQ7RN\R3DFNKHOGLQ2FWREHU
where it exhibited a variety of products that demonstrate the value that the Group provides to its customers. These included a new water- andoil-resistant coating varnish for the interior surfaces of paper food packaging that was developed as a uniquely DIC solution to help address
VXFKNH\VRFLDOLPSHUDWLYHVDVPDULQHSODVWLFV2YHUVHDVWKH*URXSWRRNSDUWLQ3DLQW,QGLDRQHRI,QGLD¶VODUJHVWH[KLELWLRQVRIFRDWLQJVDQGUHODWHGPDWHULDOVLQ0DUFKZLWKWKHDLPRIVWUHQJWKHQLQJLWVFRPPXQLFDWLRQZLWKFXVWRPHUVLQWKHUDSLGO\JURZLQJ$VLDQPDUNHW,QFRPPHPRUDWLRQRILWVWKDQQLYHUVDU\LQ)HEUXDU\',&ZHOFRPHGDWRWDORIDSSUR[LPDWHO\FXVWRPHUVDQGVXSSOLHUVWRHYHQWV
LQ7RN\R1DJR\DDQG2VDNDUHLWHUDWLQJLWVFRPPLWPHQWWRJURZLQJWRJHWKHUZLWKLWVFXVWRPHUV,Q$SULOWKH*URXSHVWDEOLVKHGWKH',&
Packaging Solution Center, a facility for collaboration with customers in the development of packaging, primarily for food products and everyday
commodities, from planning and design through to commercialization. The following month, DIC held an event at its corporate headquarters in
7RN\RWRPDUNWKHODXQFKRIWKH$VLD&RORU7UHQG%RRN±WRXQYHLOWKHODWHVWHGLWLRQRIWKLVXQLTXHSXEOLFDWLRQDQGLQWURGXFHLQLWLDWLYHV
that embody the Group’s Color & Comfort brandslogan, while at the same time creating new value
by providing an opportunity for interaction amongpeople from various industries. On another front,
DIC continued employing a dedicated system in
RSHUDWLRQ VLQFH  WR PHDVXUH WKH SRUWLRQ RI
sales accounted for by repeat customers, using thisas an indicator to measure customer satisfaction,
as well as to working to grasp and improve
CITE Japan
WKDQQLYHUVDU\FHOHEUDWLRQ
customer satisfaction.

Digital Marketing
The DIC Group actively promotes digital marketing activities. In the past, communication with customers centered on sales visits and otherface-to-face efforts. However, with the increasing dominance of electronic communications, including email, social media and websites,
the focus for customers has rapidly shifted to these media. Accordingly, the DIC Group has introduced marketing automation designed tomore effectively utilize electronic communications channels with the aim of responding swiftly to customer requests. The Group will continue
working to enhance its communications with customers by ensuring its ability to address inquiries in a timely manner.

| Ties with Shareholders and Investors
The DIC Group has established a policy for promoting constructive dialogue with shareholders
and strives to ensure fair, appropriate and timely disclosure and to communicate closely withshareholders and investors, as well as to raise awareness of its ESG initiatives. Views and concerns
expressed are shared with management and incorporated into operations as appropriate.
,Q¿VFDO\HDUWKH*URXSVRXJKWWRHQKDQFHFRPPXQLFDWLRQZLWKWKHLQYHVWPHQWFRPPXQLW\in Japan by holding two results presentations for institutional investors and securities analysts, aswell as by participating in investor relations (IR) conferences organized by securities companies
DQGLQYDULRXV,5PHHWLQJV',&DOVRKHOG',&,5'D\WRHQFRXUDJHDGHHSHUXQGHUVWDQGLQJ
of the business it expects to drive growth going forward. Overseas, the Group held IR meetings andparticipated in IR conferences organized by securities companies in North America, Europe and Asia
to encourage familiarity with its business strategies. Active efforts to advance communication withRYHUVHDVLQYHVWRUVDOVRLQFOXGHGRQHRQRQHPHHWLQJVFRQGXFWHGLQSHUVRQRUE\WHOHSKRQH
To provide information to individual investors, the Group participated in six company presentationsin Japan, which were attended by approximately 500 individuals, to further understanding of its
business activities and ESG initiatives. The Group also continued to actively provide information for
individual investors via the DIC global website, as well as through conventional mass media.

President and CEO Kaoru Ino speaks to analysts at DIC’s
ILVFDO\HDUUHVXOWVDQQRXQFHPHQW )HEUXDU\

DIC IR Day

DIC Report 2019145

Communication with Stakeholders| Ties with Society
In addition to the business community, the DIC Group strives to communicate effectively with ordinary consumers, including students. As part of thiseffort, the Group deploys the DIC Color Guide® Event Pack, which originated with an employee proposal, across Japan. Used at site functions, local
events and activities organized for children, this unique tool promotes communication with the communities in which the Group operates.
,Q$SULODSUHVVFRQIHUHQFHZDVKHOGWRDQQRXQFHDQHZ-,6VWDQGDUGIRUVDIHW\FRORUVDQGVDIHW\VLJQV -,6= WKHRXWFRPHRIDSURMHFWWRVHOHFWQHZFRORUVLQZKLFKWKH',&*URXSSDUWLFLSDWHG-,6=ZDVRULJLQDOO\HVWDEOLVKHGLQDQGWKHFRORUVVSHFL¿HGE\WKHVWDQGDUG
DUHXVHGEURDGO\LQLQIRUPDWLRQVLJQVDWSXEOLFIDFLOLWLHVDQGWRLQGLFDWHWKHVHYHULW\OHYHORIGLVDVWHUV7KLVZDVWKH¿UVWUHYLVLRQLQ\HDUVDQGZDVXQGHUWDNHQEDVHGRQWKH¿QGLQJVRIDQH[WHQVLYHDZDUHQHVVVXUYH\ZLWKWKHDLPRIHQKDQFLQJVLJQDJHLQDGYDQFHRIWKH7RN\R2O\PSLFDQG
Paralympic Games by creating color combinations that can be discerned by people with all types of color vision, in line with the principles of CUD. In-XQHWKHQHZFRORUVZHUHDGRSWHGE\-DSDQ¶V'LJLWDO6LJQDJH&RQVRUWLXP',&¶VRULJLQDOFDOHQGDUIRUWLOHG³7KH:RUOGRI-RVHSK&RUQHOO´ZDVKRQRUHGZLWKDVLOYHUDZDUG FDWHJRU\ LQWKHWK$OO-DSDQ&DOHQGDUCompetition, which is sponsored by the Japan Federation of Printing Industries and Fuji Sankei Business-i, a well-known Japanese business and¿QDQFHSXEOLFDWLRQ$QDQQXDOHYHQWWKHFRPSHWLWLRQUHFRJQL]HVFDOHQGDUVSURGXFHGE\JHQHUDOIRUSUR¿WRUJDQL]DWLRQVDVZHOODVE\SXEOLVKHUVDQG
printing companies, among others, in terms of printing technology, planning, design, functionality and creativity. DIC will continue working to plan,
design and produce innovative original calendars that appeal to stakeholders.
)LVFDO\HDUKLJKOLJKWVDWWKH.DZDPXUD0HPRULDO',&0XVHXPRI$UWLQFOXGHG³%ULGJHW5LOH\²3DLQWLQJVIURPWKHVWRWKH3UHVHQW´WKH
¿UVWPDMRUH[KLELWLRQRIZRUNVE\%ULGJHW5LOH\DQDUWLVWUHQRZQHGIRUDEVWUDFWSDLQWLQJVHPSOR\LQJJHRPHWULFSDWWHUQVLQ-DSDQLQ\HDUV7KH
FDWDORJIRUWKHH[KLELWLRQZDVFKRVHQWRUHFHLYHWKH+LURPX+DUD$ZDUGZKLFKUHFRJQL]HVH[FHOOHQFHLQERRNGHVLJQDQGLVFRQIHUUHGDVSDUWRIWKH7RN\R$UW'LUHFWRUV&OXE $'& $ZDUGV7KHPXVHXPDOVRKHOGDQH[KLELWLRQWLWOHG³/DQJXDJHDQG$UW7DNDVKL+LUDLGHDQGWKH$UWLVWV´LQZKLFKpoet Hiraide sought to shine a light on the unique language of artists by exhibiting a variety of unique published materials that came into being as aresult of deep artist dialogue with renowned global artists.
,Q¿VFDO\HDU',&GHFODUHGDQHZEUDQGVORJDQ³&RORU &RPIRUW´DQGODXQFKHGDQDPELWLRXVEUDQGLQJSURJUDP,Q¿VFDO\HDUWKH
Company produced the third installment of its brand advertisement for television, Sekai wo Iro de Kaeteiku ³&KDQJLQJWKHZRUOGWKURXJKFRORU´ 
DVZHOODVDWKHDQQLYHUVDU\FRPPHPRUDWLYHSULQWDGYHUWLVHPHQWDQGDVHULHVRISULQWDGYHUWLVHPHQWVKLJKOLJKWLQJWKH.DZDPXUD0HPRULDO
',&0XVHXPRI$UW7KH&RPSDQ\DOVRFRPSOHWHGDUHYDPSLQJRILWVJOREDOZHEVLWH SURGXFHGLQ-DSDQHVH(QJOLVKDQG&KLQHVH DQGHQKDQFHGPXOWLGHYLFHFRPSDWLELOLW\,Q¿VFDO\HDUWKHZHEVLWHVDZUHFRUGKLJKXVHLQWHUPVRIERWKVHVVLRQVDQGYLVLWRUV

³%ULGJHW5LOH\²3DLQWLQJVIURPWKHVWRWKH3UHVHQW´

DIC Report 2019

146

$ZDUGFHUWL¿FDWHIURPWKHWK$OO-DSDQ&DOHQGDU&RPSHWLWLRQCommunication with Stakeholders

Communication in the Field of Education,Q-XO\WKH&HQWUDO5HVHDUFK/DERUDWRULHVVSRQVRUHGDERRWKDWWKHWK&KLED6FLHQFH6FKRRO)HVWLYDOKHOGDWWKH7VXGDFDPSXVRI
WKH&KLED,QVWLWXWHRI7HFKQRORJ\7KLVHYHQWZKLFKLVVSRQVRUHGE\WKH&KLED6FLHQFH6FKRRO1HWVHHNVWRVXSSRUWWKHVFLHQWL¿FUHVHDUFK
efforts of senior high school students, as well as to encourage elementary and junior high school students to take a greater interest in
VFLHQFH7KH&HQWUDO5HVHDUFK/DERUDWRULHV¶ERRWKDWWKHIHVWLYDOWKHWKHPHRIZKLFKZDV³7KH0\VWHULHVRI&RORU´RIIHUHGVWXGHQWVthe chance to conduct experiments in the extraction of a natural blue colorant from Spirulina. The response from participating children
ZDVHQWKXVLDVWLFZLWKPDQ\H[SUHVVLQJVXUSULVHDWWKHEHDXWLIXOEOXHFRORUWKDWUHVXOWHGIURPWKH¿OWUDWLRQRIGDUNJUHHQOLTXLG7KHIHVWLYDOZHOFRPHGPRUHWKDQYLVLWRUVLQFOXGLQJFKLOGUHQDQGWKHLUIDPLO\PHPEHUVZKRWRRN
part in a variety of experiments.
,Q$XJXVWWKH',&*URXSRQFHDJDLQKRVWHGWKH&KLED3UHIHFWXUDO'UHDP&KDOOHQJH
Hands-On School, a popular program for elementary school–age children organized by
the prefecture’s Board of Education, at the Central Research Laboratories’ convention
KDOODQGWKH.DZDPXUD0HPRULDO',&0XVHXPRI$UW7KHSURJUDPLQYLWHVFKLOGUHQWR
visit companies and university research labs in Chiba to take part in experiments and tour
IDFLOLWLHV7KHSURJUDPZHOFRPHGVHOHFWHGSDUWLFLSDQWVWRFRQGXFWH[SHULPHQWVLQ
the extraction of colorants from Spirulina and paper chromatography using aqueous feltPrefectural Dream Challenge Hands-On Schooltipped pens.
(Chiba Prefecture)| Ties with Employees
The DIC Group promotes a variety of initiatives to facilitate active communication with its employees around the world.

Global Linkage
As a means of communicating with its employees worldwide, DIC launched a global intranet, Global Linkage, and created a mechanism
IRUSURPRWLQJFRPPXQLFDWLRQEHWZHHQWRSPDQDJHPHQWDQGHPSOR\HHVRIWKHJOREDO',&*URXS,Q-XQHWKH&RPSDQ\UHYDPSHG
the intranet’s home page, with the aim of expanding use. The intranet enables employees around the world to obtain key information and
GRFXPHQWDWLRQLQFOXGLQJQHZVUHOHDVHVSXEOLVKHGLQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQDQGE\6XQ&KHPLFDOUXOHVDQGJXLGHOLQHVDQG
standardized forms and other documents that support branding efforts, thereby facilitating effective communications.

Caravan
The Sustainability Department and the Corporate Communications Department collaborated to stageDZRUNVKRSGXEEHG³&DUDYDQ´GHVLJQHGWRHQFRXUDJHDZDUHQHVVRIWKH',&*URXS¶VVXVWDLQDELOLW\and branding initiatives at the Tokyo Plant. The workshop, which included a variety of meaningfuleducational activities, featured an active exchange of views, with participants expressing an
understanding of the importance of sustainability initiatives and a desire for an increased focus oninternal communications within the DIC Group. Afterward, all participants were asked to participate
LQDQLQKRXVHLQWUDQHWV\VWHPSURMHFWIDFLOLWDWLQJRQJRLQJFRPPXQLFDWLRQ,Q¿VFDO\HDUZHZLOO
H[SDQGLPSOHPHQWDWLRQRIWKLVLQLWLDWLYHWRLQFOXGHVLWHVLQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQDIC Report 2019147

Communication with Stakeholders

Family Day
2Q$XJXVW±',&KHOGWKH¿UVW)DPLO\'D\DWLWVFRUSRUDWHKHDGTXDUWHUVLQ7RN\R7KHHYHQWZHOFRPHGDWRWDORIVL[WKJUDGHRU\RXQJHUFKLOGUHQRIFRUSRUDWHKHDGTXDUWHUV¶HPSOR\HHVDQGIDPLO\members. Children took part in science labs, which DIC conducts regularly at elementary schools as part ofits sustainability program, and a greeting card–making workshop using the DIC Color Guide ® Event Pack,after which they exchanged business cards with president and CEO Kaoru Ino and sat in on a teleconference
ZLWK',&.RUHD&RUS)HHGEDFNIURPSDUWLFLSDQWVZDVSRVLWLYHZLWKFRPPHQWVUHFHLYHGLQFOXGLQJ³,KDG
IXQLQWKHVFLHQFHODE´³,UHDOO\ZLVKWKH\FRXOGGRWKHDIC Color Guide ®HYHQWDWP\VFKRROWRR´³7KH
WHOHFRQIHUHQFHZDVLQWHUHVWLQJ´³/XQFKZDVWDVW\´DQG³,IHOWSRZHULQ0U,QR¶VKDQGVKDNH´(PSOR\HH
FRPPHQWVLQFOXGHG³)DPLO\'D\KHOSHGXVFRPPXQLFDWHGLUHFWO\WRRXUNLGVZKDWNLQGRIDFRPSDQ\',&
LV´³7KHHYHQWHQFRXUDJHGPDQ\RIWKHFKLOGUHQWRWDNHDQLQWHUHVWLQFRORUDQGFKHPLFDOV´DQG³,WPDGHPH
UHDOL]HWKDWLWLVLPSRUWDQWIRUFKLOGUHQWRVHHZKHUHWKHLUSDUHQWV¶ZRUN´

Family Day

In-House Newsletter,Q0DUFKDIC PlazaZRQDQRYHUDOODZDUGIRUVHDVRQDOSXEOLFDWLRQVLQWKH)LVFDO<HDU.HLGDQUHQ,Q+RXVH
Newsletter Awards. DIC PlazaHDUQHGKLJKPDUNVIRUSODQQLQJDQGFRQWHQW²LQFOXGLQJLWVFRQFHSWZKLFKDOLJQV
with management policies, the introduction of activities by employees of the global DIC Group to highlight themes
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attractive page layout. The Group’s intranet is another way for DIC to share information on the activities of employees
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DIC Plaza| Ties with the MediaDIC is reinforcing its publicity activities as a means of communicating with its many
stakeholders, including its customers, shareholders, investors and local communities.
7KLVUHÀHFWVLWVFRQYLFWLRQWKDWSURPRWLQJDFWLYHGLVFORVXUHWKDWIDFLOLWDWHVREMHFWLYHPHGLD
coverage is vital to securing stakeholders’ understanding of the Group and its operations
DQGSURPRWLQJDVHQVHRIVROLGDULW\DPRQJHPSOR\HHV,QILVFDO \HDU',&SXWRXW
PRUHWKDQQHZVUHOHDVHVUHJDUGLQJQHZSURGXFWVFDSLWDOLQYHVWPHQWVRSHUDWLQJUHVXOWV
and sustainability. By proposing and accepting interviews on key topics such as its efforts
to protect its intellectual property rights, DIC also succeeded in bringing forward issues ofconcern not only to the Company but also to the chemicals industry as a whole.

Press conferences heldin Àscal year 2018

Interviews withjournalistsin Àscal year 201882

92

| External Assessments,Q¿VFDO\HDU',&ZDVVHOHFWHGIRULQFOXVLRQLQWKH'RZ-RQHV6XVWDLQDELOLW\,QGLFHV$VLD3DFL¿F,QGH[DOHDGLQJEHQFKPDUNIRUVXVWDLQDELOLW\LQLWLDWLYHVLQWKH$VLD±3DFL¿FUHJLRQDQGSDUWRIWKH'RZ-RQHV6XVWDLQDELOLW\,QGLFHV '-6, DJOREDOIDPLO\RILQGLFHVIRU
socially responsible investment (SRI). This was the fourth consecutive year DIC has been selected for inclusion.
',&ZDVDOVRVHOHFWHGDVDFRQVWLWXHQWRIWKH06&,-DSDQ(6*6HOHFW/HDGHUV,QGH[DQ(6*LQYHVWPHQWLQGH[RIOHDGLQJ-DSDQHVHFRPSDQLHVDQGRIWKH06&,-DSDQ(PSRZHULQJ:RPHQ,QGH[ :,1 ERWKGHYHORSHGE\86EDVHG06&,,QFIRUWKHVHFRQGFRQVHFXWLYH
\HDU,Q¿VFDO\HDUWKH&RPSDQ\ZDVDOVRVHOHFWHGIRUWKH¿UVWWLPHIRULQFOXVLRQLQWKH)76(*RRG,QGH[)76(%ORVVRP-DSDQ,QGH[DQGWKH6 3-3;&DUERQ(I¿FLHQW,QGH[$VDUHVXOWWKH&RPSDQ\LVQRZLQFOXGHGLQDOOIRXURIWKH(6*LQYHVWPHQWLQGLFHVWDUJHWLQJ-DSDQHVH
equities used by Japan’s Government Pension Investment Fund (GPIF), which seeks stock indices comprising companies with outstanding ESGSHUIRUPDQFHV 06&,-DSDQ(6*6HOHFW/HDGHUV,QGH[:,1)76(%ORVVRP-DSDQ,QGH[DQG6 3-3;&DUERQ(I¿FLHQW,QGH[ ProNed Inc., which advises companies on ensuring effective corporate governance, ranked DIC’s corporate governance program as Score
LQ¿VFDO\HDUWKHWRSPDUNWKDWLWDZDUGV:LWKWKHDLPRIGULYLQJVXVWDLQDEOHJURZWKWKH',&*URXSDOVRSDUWLFLSDWHVLQDQXPEHURIUNGC working groups (SRI/ESG, GC Internal Promotion, Supply Chain, Human Rights Due Diligence and Disaster Risk Reduction).

DIC Report 2019148

Communication with Stakeholders

DIC Report 2019149

DIC Report 2019 and the GRI Standards
DIC Report 2019 was prepared in compliance with the GRI Standards’ “Core” option.
Standard

DisclosuresPage(s), etc.

Related information / Reasons for omission

G4 standard

ISO 26000

GRI 102:

General Disclosures 2016

1

Organizational proÀle

102-1

Name or organization

3 (The DIC Group: A Global Powerhouse)

102-2

Activities, brands, products,
and services

15–16 (The DIC Group’s Approach to Value Creation),
23 (Packaging & Graphic), 25 (Color & Display), 27 (Functional Products),
137 (New Technology Development and Value Creation)

102-3

Location of headquarters

3 (The DIC Group: A Global Powerhouse)

G4-5

―

102-4

Location of operations

3–4 (The DIC Group: A Global Powerhouse), 159 (Corporate Data)

G4-6

―

102-5

Ownership and legal form

3 (The DIC Group: A Global Powerhouse)

G4-7

―

G4-8

―

G4-9

―

6.4
6.4.3

G4-3

―
―

15–16 (The DIC Group’s Approach to Value Creation), 23 (Packaging & Graphic), 25 (Color &Display), 27 (Functional Products), 137–139 (New Technology Development and Value Creation)
3–4 (The DIC Group: A Global Powerhouse), 166 (Corporate Data), 2–4 of the
Financial Section (“Management’s Discussion and Analysis”)

102-6

Location of operations

102-7

Scale of the organization

102-8

Information on employees
and other workers

116 (Basic Personnel Statistics (DIC))

G4-10

102-9

Supply chain

131 (Sustainable Procurement)

G4-12

102-10SigniÀcant changes to the organization
22 (Information on new organization), 24&26 (Information on new acquisitions)and its supply chain

G4-13

―

102-11

Precautionary principle or approach

64–67 (Information on ESH management system )

G4-14

6.2

102-12External initiatives

51–52 (Ensuring DIC Remains a Globally Trusted Corporate Citizen with a
Proud Reputation), 148 (External Assessments)

G4-15

6.2

UNGC, JCIA, Keidanren, Keizai Doyukai, Japan Printing Ink Makers Association

G4-16

6.2

G4-1

6.2

G4-2

6.2

1 (The DIC Way), 54 (The DIC Group Code of Business Conduct)

G4-56

―

55 (Establishing and Operating a Whistle-Blowing System)

G4-57,
G4-58―

102-13

Membership of associations

2

Strategy102-14

Statement from senior decision-maker

7–12 (A Message from the President)

102-15Key impacts, risks, and opportunities

44–47 (Risk Management), 50–52 (Overview of Sustainability)

3

Ethics and integrity

102-16102-17

Values, principles, standards,
and norms of behavior
Mechanisms for advice and concern
about ethics

23 (Packaging & Graphic), 25 (Color & Display),
27 (Functional Products)

4

Governance102-18Governance structure

39–40 (Corporate Governance), 48–49 (Directors, Audit & Supervisory Board
0HPEHUVDQG([HFXWLYH2I¿FHUV  6\VWHPIRU3URPRWLQJ6XVWDLQDELOLW\Initiatives)

G4-34

6.2

102-19Delegating authority

51 (System for Promoting Sustainability Initiatives)

G4-35

―

G4-36

―

G4-37

6.2

G4-38

6.2

102-20102-21
102-22

Executive-level responsibility for
51 (System for Promoting Sustainability Initiatives)
economic, environmental, and social topics
Consulting stakeholders on economic,
environmental, and social topics
Composition of the highest governance± &RUSRUDWH*RYHUQDQFH RI¿FLDOFRUSRUDWHJRYHUQDQFHUHSRUW
body and its committees

102-23Chair of the highest governing body± &RUSRUDWH*RYHUQDQFH RI¿FLDOFRUSRUDWHJRYHUQDQFHUHSRUW

G4-39

6.2

102-24

Nominating and selecting the highest
governance body± &RUSRUDWH*RYHUQDQFH RI¿FLDOFRUSRUDWHJRYHUQDQFHUHSRUW

G4-40

6.2

102-25ConÁicts of interest

Yuka Shoken Hokokusho

G4-41

6.2

Role of highest governance body insetting purpose, values, and strategy
Collective knowledge of highest
governing body
Evaluating the highest governing
body’s performance
Identifying and managing economic,
environmental, and social impacts
Effectiveness of risk management
processes
Review of economic, environmental
and social topics
Highest governance body’s role insustainability reporting

39–40 (Corporate Governance), 51 (System for Promoting Sustainability
Initiatives)
39–40 (Corporate Governance), 51 (System for Promoting Sustainability
Initiatives)

G4-42

―

G4-43

―

G4-44

6.2

44–47 (Risk Management), 50–51 (Sustainability initiatives)

G4-45

6.2

44–47 (Risk Management), 50–51 (Sustainability initiatives)

G4-46

―

44–47 (Risk Management), 50–51 (Sustainability initiatives)

G4-47

6.2

44–47 (Risk Management), 50–51 (Sustainability initiatives)

G4-48

―

102-33

Communicating critical concerns

44–47 (Risk Management), 51 (System for Promoting Sustainability Initiatives)

G4-49

6.2

102-34Nature and total number of criticalconcerns

—

G4-50

―

102-35

Remuneration policies

43 (Remuneration for Executives), 41–43 of the Yuka Shoken Hokokusho

G4-51

6.2

102-36

Process for determining remuneration

43 (Remuneration for Executives), 41–43 of the Yuka Shoken Hokokusho

G4-52

―

102-37

Stakeholders’ involvement inremuneration

—

G4-53

6.2

102-38Annual total compensation ratio

—

G4-54

―

102-39Percentage increase in annual total—compensation ratio

G4-55

―

102-26102-27102-28102-29102-30102-31
102-3211 of the Yuka Shoken Hokokusho (“Employees”)

DIC Report 2019

150

5

Stakeholder engagement102-40

List of stakeholder groups

144 (Communication with Stakeholders)

G4-24

6.2

102-41

Collective bargaining agreements

Japan: 62.7% of employees belong to a labor union (for eligible employees, therate is close to 100%)
Overseas: Employees have collective bargaining rights as allowed for by thelaws and regulations of the country/territory in which they are employed (as of
WKHHQGRI¿VFDO\HDU

G4-11

6.3.10
6.4
6.4.3
6.4.4
6.4.5

102-42

Identifying and selecting
stakeholders

144 (Communication with Stakeholders)

G4-25

6.2

144–149 (Communication with Stakeholders)G4-26,
G4-PR5

6.2
6.7
6.7.4
6.7.5
6.7.6
6.7.8
6.7.9

G4-27,
G4-PR5

6.2

3 (The DIC Group: A Global Powerhouse), 159 (Corporate Data)

G4-17

6.2

50–51 (Overview of Sustainability)

G4-18

―

102-43

Approach to stakeholder engagement102-44

Key topics and concerns raised

6

Reporting practice102-45102-46

Entities included in the consolidatedÀnancial statements
Defining report content and topic
boundaries

144–149 (Communication with Stakeholders)

102-47

List of material topics

53 (Materiality Analysis)

G4-19

―

102-48

Restatements of information

NA

G4-22

―

102-49Changes in reporting

53 (Materiality Analysis) (Review of materiality)

G4-23

―

102-50

Reporting period

2 (About this Report)

G4-28

―

102-51

Date of most recent report

2 (About this Report)

G4-29

―

102-52

Reporting cycle

2 (About this Report)

G4-30

―

G4-31

―

G4-32-a―

102-53102-54102-55

Contact point for questions regarding
Back cover
the report
Claims of reporting in accordance with
2 (About this Report)
the GRI standards
GRI content index(150–153) (DIC Report 2019 and the GRI Standards (this table))

G4-32-b

102-56External assurance

64–67 (ESH (Management System)), 7KLUG3DUW\9HUL¿FDWLRQ

G4-32-c,
G4-33

7.5.3

103

Management approach

GRI 103:

General Disclosures 2016

103-1

Explanation of the material topic andits boundary

53 (Materiality Analysis)

G4-DMA-a,
G4-20,
G4-21

―

103-2

The management approach andits components

103-3

Evaluation of the management
approach200

Economic topics

GRI 201:

Economic Performance 2016

201-1

Direct economic value generated
and distributed

201-2
201-3
201-4

Financial implications and other risks
and opportunities due to climate changeDeÀned beneÀt plan obligations andother retirement plans
Financial assistance received fromgovernment

GRI 202:

Market Presence 2016

202-1

Ratios of standard entry level wage by
gender compared to local minimum wage

202-2

Proportion of senior management
hired from the local community

DIC Group general materiality issues• Transformation to a sustainable business structure• Efforts to strengthen product development capabilities and create new
businesses• Response to a circular economy
134 (Business Models that Respond to Social Imperatives)• Product stewardship
64 (ESH), 112 (Quality), 131 (Sustainable Procurement)• Response to climate change• Reduction of environmental impact (emissions into the air and water)
64 (ESH)• Response to changes in environmental laws and regulations
56 (BCM and Crisis Management)• Promotion of sustainable procurement• Strengthening of partnerships
131 (Sustainable Procurement)• Governance at subsidiaries
54 (Compliance)• Information security
62 (Information security)• Ability to maximize capital efÀciency• Digital transformation• Food security
13 (New Medium-Term Management Plan: DIC111)• Communication with customers and markets
144 (Communication with Stakeholders)
As above, assessment results are indicated on various pages;
51 (System for Promoting Sustainability Initiatives)

G4-DMA-b,
G4-EN34,―
G4-LA16,
G4-HR12,
G4-SO11

G4-DMA-c

3–4 (The DIC Group: A Global Powerhouse),
2–4 of the Financial Section (Management’s Discussion and Analysis)

G4-EC1

6.8
6.8.3
6.8.7
6.8.9

92 (Support for the TCFD)

G4-EC2

6.5.5

78 of the Yuka Shoken Hokokusho

G4-EC3―̶

G4-EC4―G4-EC5

6.4.4
6.8
6.8
6.8.5
6.8.7

11 of the Yuka Shoken Hokokusho

G4-EC6

DIC Report 2019

151

GRI 203:

Indirect economic impacts 2016

203-1

Infrastructure investments andservices supported

140 (Harmony with the Community and Social Contributions)Global corporate website (Home page > Sustainability >Harmony with the Community and Social Contributions

G4-EC7203-2

SigniÀcant indirect economic impacts

140 (Harmony with the Community and Social Contributions)Global corporate website (Home page > Sustainability >Harmony with the Community and Social Contributions

G4-EC8

GRI 204:

Procurement Practices

204-1

Proportion of spending on local
suppliers

GRI 205:

Anti-Corruption 2016

205-1
205-2
205-3

Operations assessed for risks related
to corruption
Communication and training
about anti-corruption policies andproceduresConÀrmed incidents of corruption andactions taken

6.3.9
6.8
6.8.3
6.8.4
6.8.5
6.8.6
6.8.7
6.8.9
6.3.9
6.6.6
6.6.7
6.7.8
6.8
6.8.5
6.8.6
6.8.7
6.8.9

G4-EC9

6.6
6.6.8
6.8.5
6.8.7

54–55 (Compliance)

G4-SO3

6.6
6.6.3

54–55 (Compliance)

132 (Encouraging CSR Procurement)

G4-SO4

6.6
6.6.3

NA

54 (Goals and Achievements of Major Achievements)

G4-SO5

6.6
6.6.3

54 (Goals and Achievements of Major Achievements)

G4-SO7

6.6
6.6.5
6.6.7

̶

GRI 206:

Anti-competitive Behavior 2016

206-1

Legal actions for anti-competitive behavior,NAanti-trust, and monopoly practices

300

Environmental topics

GRI 301:

Materials 2016

301-1

Materials used by weight or volume

̶G4-EN1

6.5.4

301-2

Recycled input materials used̶

G4-EN2

6.5.4

301-3

Reclaimed products and theirpackaging materials

̶G4-EN28

6.5.3
6.5.4
6.7.5

GRI 302:

Energy 2016

302-1

Energy consumption within theorganization

81 (Energy Consumption and CO2 Emissions by the DIC Group), 85 (Reduction in
CO2 Emissions by the DIC Group in Japan Attributable to the Use of Renewable
Energy), 81 (CO2 Emissions by the DIC Group in Japan (Including Scope 3))

G4-EN3

6.5.4

302-2

Energy consumption outside theorganization

̶

GA-EN4

6.5.4

302-3

Energy intensity

 1RQ¿QDQFLDO,QIRUPDWLRQ

G4-EN5

6.5.4

302-4

Reduction of energy consumption

82 (Information on energy-saving initiatives in Japan)

G4-EN6

302-5

Reductions in energy requirements ofproducts and services

82 (Key DIC Group Energy-Saving Initiatives in Japan in Fiscal Year 2018)

G4-EN7

6.5.4
6.5.5
6.5.4
6.5.5

GRI 303:

Water 2016

303-1

Water withdrawal by source

99 (Managing Water Resources)

G4-EN8

6.5.4

303-2

Management of water discharge related
99 (Managing Water Resources)
impacts

G4-EN9

6.5.4

303-3

Water withdrawal

99 (Managing Water Resources)

G4-EN10

6.5.4

303-4

Water discharge

99 (Managing Water Resources)

6.5.4

303-5

Water consumption ,QLWLDWLYHVLQ¿VFDO\HDU 6FRSHRI5HSRUWLQJIRUWKH:LWKGUDZDORIFresh Water and Discharge of Wastewater))

6.5.4

GRI 304:

Biodiversity

304-1
304-2

Operational sites owned, leased,managed in, or adjacent to, protectedareas and areas of high biodiversity
value outside protected areas
SigniÀcant impacts of activities,
products, and services in biodiversity

Regarding water withdrawal in water-stressed areas, initial water
risks were assessed at 189 sites using a water risk assessment tool.

̶G4-EN11

6.5.6

̶

G4-EN12

6.5.6

304-3

Habitats protected or restored̶

G4-EN13

6.5.6

304-4

IUCN Red List species and national
conservation list species with habitats
in areas affected by operations

̶

G4-EN14

6.5.6

GRI 305:

Emissions 2016

305-1

Direct (Scope 1) GHG emissions

77–95 (Initiatives Aimed at Preventing Global Warming)

G4-EN15

6.5.5

Energy indirect (Scope 2) GHG
emissions
Other indirect (Scope 3) GHG
emissions

81 (CO2 Emissions by the DIC Group in Japan (Including Scope 3))

G4-EN16

6.5.5

81 (CO2 Emissions by the DIC Group in Japan (Including Scope 3)), 102 (Safety
in Logistics)

G4-EN17

6.5.5

305-4

GHG emissions intensity

 1RQ¿QDQFLDOLQIRUPDWLRQ

G4-EN18

6.5.5

305-5

Reduction of GHG emissions

79–80 (CO2 Emissions by Region)

G4-EN19

6.5.5

87 (Protecting the Ozone Layer)

G4-EN20

6.5.3
6.5.5

93 (Preventing Environmental Pollution), 94 (Reducing SOx, NOx and COD)

G4-EN21

6.5.3

305-2
305-3

305-6
305-7

Emissions of ozone-depleting
substances (ODS)
Nitrogen oxides (NOx), sulfur oxides (SOx)and other significant air emissions

DIC Report 2019

152

GRI 306:EfÁuents and Waste 2016306-1

Water discharge by quality anddestination

93 (Preventing Environmental Pollution),
98 (Environmental Impact of the DIC Group’s Operating Activities)

G4-EN22

6.5.3
6.5.4

306-2

Waste by type and disposal method

97 (Deployment of Comprehensive Industrial Waste Management System)

G4-EN23

6.5.3

306-3

SigniÀcant spills

NA

G4-EN24

6.5.3

306-4

Transport of hazardous waste

NA

G4-EN25

6.5.3

306-5

Water bodies affected by water
discharges and/or runoff̶

G4-EN26

6.5.3
6.5.4
6.5.6

GRI 307:

Environmental Compliance 2016

307-1

Non-compliance with environmental
68 (ESH Auditing)laws and regulations

G4-EN29

4.6

GRI 308:

Supplier Environmental Assessment 2016308-1

New suppliers that were screenedusing environmental criteria̶

131 (Sustainable Procurement)

G4-EN32

308-2

Negative environmental impacts in the
supply chain and actions taken

131 (Sustainable Procurement)'LVFORVXUHUHJDUGLQJWKHQXPEHURIVXSSOLHUVDQGVSHFL¿FQHJDWLYHLPSDFWVLVSURWHFWHGE\FRQ¿GHQWLDOLW\DJUHHPHQWV

G4-EN33

400

Social topics

GRI 401:

Employment 2016
116 (Basic Personnel Statistics)

119 (Hiring Diverse Human Resources)

G4-LA1115 (Human Resources Management)

G4-LA2

401-1
401-2

New employee hires and employee
turnoverBeneÀts provided to full-time
employees that are not provided totemporary or part-time employees

401-3

Parental leave

GRI 402:

Labor/Management Relations 2016

402-1

Minimum notice periods regarding
operational changes

GRI 403:

Occupational Health and Safety 2016

403-1
403-2

403-3

403-4
403-5
403-6
403-7
403-8
403-9

Occupational health services

Promotion of worker health

G4-LA5G4-LA670 (Making Regional Data Visible through Monthly Reports), 70 (Reducing
Risks), 71 (Kiken Yochi Training (KYT)), 74 (Safe Corporate Climate Cultivation
Working Groups)

G4-LA7G4-LA8Training and Education 2016
Average hours of training per year per
employee
Programs for upgrading employee
skills and transition assistanceprograms
Percentage of employee receiving regularperformance and career development reviews

75 (Occupational Health)―127 (DIC Training Programs)

―

6.3.5
6.6.6
7.3.1
6.3.5
6.6.6
7.3.1

6.4
6.4.3
6.4
6.4.3
6.4.4
6.4
6.4.3
6.4
6.4.3
6.4.4 6.4.5
6.4
6.4.6
6.4
6.4.6
6.4
6.4.6
6.8
6.8.3
6.8.4
6.8.8
6.4
6.4.6
6.4
6.4.6
6.4
6.4.6
6.4
6.4.6
6.4
6.4.6

Prevention and mitigation of occupational health and
70 (Reducing Risks)
safety impacts directly linked by business relationships
Workers covered by an occupational
64–68 (Management System), 69–76 (Occupational Safety and Health)health and safety management system
74 (Status of Occupational Accidents), 75 (Disaster Prevention), 70 (Reducing
Worker-related injuries
Risks)GRI 404:404-3

G4-LA4$PLQLPXPQRWLFHSHULRGLVSURYLGHGDVVSHFL¿HGLQODERUDJUHHPHQWV

71 (Promoting E-Learning–Based Training for Employees, Promoting Hands-On
Worker participation, consultation, andcommunication on occupational health and safety Safety Training)
Worker training on occupational health71 (Kiken Yochi Training (KYT))
and safety

Work-related ill health404-2

G4-LA3124 (Work and Childcare Balance Support Programs)

Occupational health and safety
64–68 (Management System), 69 (Occupational Safety and Health)management system
Hazard identiÀcation, risk assessment,
64–68 (Management System), 69–76 (Occupational Safety and Health)and incident investigation

403-10404-1

99 (Managing Water Resources)

64 (Environment, Safety and Health (ESH)), 83 (Reducing Energy Consumption and Enhancing
Product Quality through Kaizen Skill Improvement Training), 113 (Efforts to Enhance ProductQuality–Related Educational Initiatives), 116–117 (Human Resources Management)
126 (Securing and Fostering Human Resources) (All DIC employees, regardless of gender,
job or rank, receive performance and career development reviews twice annually.)

G4-LA8

6.4
6.4.6
6.4
6.4.6

G4-LA96.4
6.4.7

G4-LA10

6.4
6.4.7
6.8.5

G4-LA11

6.4
6.4.7

GRI 405:

Diversity and Equal Opportunity 2016405-1

Diversity of governance bodies andemployees

48–49 (Directors, Audi & Supervisory Board Members and Executive Officers), 122
119 (Diversity Promotion and Work Style Reform), 13 (New Medium-Term(Advancing the Employment of Individuals with Disabilities, Reemployment after
G4-LA12
Management Plan: DIC111)
Retirement and Support for Retirement Planning), 127 (Global Talent Development)

405-2

Ratio of basic salary andremuneration of women to men―

G4-LA13

6.3.7
6.3.10
6.4
6.4.3
6.4.4

GRI 406:

Non-discrimination 2016406-1

Incidents of discrimination andcorrective actions taken

NA

G4-HR3

6.3
6.3.6
6.3.7
6.3.10
6.4.3

GRI 407:

Freedom of Association and Collective Bargaining 2016

407-1

Operations and suppliers in which
the right to freedom of associationand collective bargaining may be
at risk

G4-HR4

6.3
6.3.3
6.3.4
6.3.5
6.3.8
6.3.10
6.4.3
6.4.5

118 (Due Diligence Initiatives to Address Principal Human Rights Challenges)

DIC Report 2019153

51 (Ensuring DIC Remains a Globally Trusted Corporate
Citizen with a Proud Reputation), 131 (Sustainable
Procurement)

6.3.7 6.3.10
6.4
6.4.3

GRI 408: Child Labor 2016
408-1

Operations and suppliers at signiÀcant
118 (Human Resources Management)risk for incidents of child labor

G4-HR5

6.3
6.3.3
6.3.4
6.3.5
6.3.7
6.3.10131 (Sustainable Procurement)

G4-HR6

6.3
6.3.3
6.3.4
6.3.5
6.3.7
6.3.10118 (Human Resources Management)

G4-HR7

6.3
6.3.5
6.4.3
6.6.6

G4-HR8

6.3
6.3.6
6.3.7
6.3.8
6.6.7

131 (Sustainable Procurement)

GRI 409: Forced or Compulsory Labor 2016409-1

Operations and suppliers at signiÀcant
risk for incidents of forced or
118 (Human Resources Management)
compulsory labor

GRI 410: Security Practices 2016
410-1

Security personnel trained in humanrights policies or procedures

GRI 411: Rights of Indigenous Peoples
411-1

Incidents of violations involving rights
of indigenous peoples

NA

GRI 412: Human Rights Assessment 2016
412-1
412-2
412-3

Operations that have been subject
to human rights reviews or impact
assessments

G4-HR9117 (Human Resources Management)

Employee training on human rights
policies or procedures
SigniÀcant investment agreements andcontracts that include human rights―
clauses or that underwent humanrights screening

116 (Human Resources Management)

G4-HR2G4-HR1

6.3
6.3.3
6.3.4
6.3.5
6.3
6.3.5
6.3
6.3.3
6.3.5
6.3.6

GRI 413: Local Communities 2016413-1

Operations with local community
engagement, impact assessments, anddevelopment programs

413-2

Operations with signiÀcant actual andpotential negative impacts on local
communities

146 (Communication with Stakeholders)

G4-SO1

G4-SO2

―

6.3.9
6.6.7
6.8
6.8.5
6.8.7
6.3.9
6.5.3
6.5.6
6.8.9

GRI 414: Supplier Social Assessment 2016414-1

New suppliers that were screenedusing social criteria

414-2

Negative social impacts in the supply
chain and actions taken

G4LA14,G4-HR10,
G4-SO9Disclosure regarding the number of suppliers and specific G4-LA15,
negative social impacts is protected by confidentiality G4-HR11,
G4-SO10agreements.
132 (Sustainable Procurement)

132 (Sustainable Procurement)――

GRI 415: Public Policy 2016
415-1

Political contributions

G4-SO6―

GRI 416: Customer Health and Safety
416-1

Assessment of the health and safety
impacts of product and service
categories

416-2

Incidents of non-complianceconcerning the health and safety
impacts of products and servicesNA

64 (Focus on Product Stewardship), 112 (Quality)

G4-PR1114 (Preventing the Recurrence of Problems)

G4-PR2

6.3.9
6.6.6
6.7
6.7.4
6.7.5
6.3.9
6.6.6
6.7
6.7.4
6.7.5

GRI 417: Marketing and Labeling 2016
6.7
6.7.3
6.7.4
6.7.5
6.7.6
6.7.9
6.7
6.7.3
6.7.4
6.7.5
6.7.6
6.7.9
6.7
6.7.3
6.7.6
6.7.9

417-1

Requirements for product and service
information and labeling105 (Ensuring the Safety of Chemical Substances)417-2

Incidents of non-complianceconcerning product and service
information and labelingNA

G4-PR4417-3

Incidents of non-complianceconcerning marketing
communications

NA

G4-PR7NA

G4-PR86.7
6.7.7

G4-SO8,G4-PR9

6.6
6.6.3
6.6.7
6.8.7

113 (Initiatives Aimed at Increasing Customer Satisfaction)

G4-PR3

GRI 418: Customer Privacy 2016
418-1

Substantial complaints concerning
breaches of customer privacy andlosses of customer data

GRI 419: Socioeconomic Compliance 2016
419-1

Non-compliance with laws andregulations in the social andeconomic areaNA

DIC Report 2019154

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 2019155

Third-Party Opinion Regarding DIC Report 2019

Counselor,
The Japan Research Institute, Limited

Eiichiro Adachi
In his current capacity, Eiichiro Adachi
conducts industry research andassesses corporate per formance fromthe perspective of social responsibility.
A member of the Market Evolution
and Corporations in the 21st Centur yworking group organized by the Keizai
Doyukai (Japan Association of Corporate
Executives), Mr. Adachi was involved in the
preparation of The 15th Corporate White
Paper on “‘Market Evolution’ and CSRManagement: Toward Building Integrity
and Creating Shareholder Value.” From
March 2005 to May 2009, he also served
as a national expert within the Japanesedelegation to the ISO 26000 working group.
In March 2019, he was appointed a national
expert within the Japanese delegation
to the ISO/ TC322, the ISO’s technicalcommittee for sustainable finance. Mr.
Adachi is also known as the author ofseveral books, including Environmental
Management: A Beginners’ Guide, ESG
Handbook for Investors and Businesses
and The Business Person’s Guide to the
SDGs (published in Japanese).

This third-party opinion reflects my view ofthe sustainability initiatives and information
GLVFORVXUH RI WKH ',& *URXS DV XQGHUVWRRG
from reading this report, from my perspective
as an individual who provides corporate
information to financial institutions to assist
SRI. It is not intended as a comment onwhether or not the information herein has
been measured and calculated accurately toconform to commonly accepted standards
for the preparation of environmental or otherreports or a judgment on whether the reportcovers relevant important matters in full.

2QFHDJDLQWKLV\HDU,KDGWKHKRQRURIUHYLHZLQJWKH',&5HSRUW7KH¿UVWWKLQJ,
noticed in this year’s report was the fact that the Company had reorganized its existing¿YHVHJPHQWVLQWRWKUHHQHZVHJPHQWV3DFNDJLQJ *UDSKLF&RORU 'LVSOD\DQG
Functional Products. The explanation given is that DIC had often heard from investors
WKDWWKH\IRXQGLWGLI¿FXOWWRXQGHUVWDQGLWVFRUSRUDWHGLUHFWLRQDQGIRUWKDWUHDVRQKDV
shifted the focus of its segments to value provided thereby making its message easy
to understand. It is worth noting that this has also increased understanding from the
SHUVSHFWLYHRIULVNVDQGRSSRUWXQLWLHVIDFLQJWKH',&*URXS
Another thing that caught my attention was the case study of Hydrect, an exciting
QHZSURGXFWLQWKH3DFNDJLQJ *UDSKLFVHJPHQWZKLFKLVSUHVHQWHGDVDFDVHVWXG\illustrating DIC’s efforts to create a powerful business opportunity by quickly grasping
global social changes pertaining to sustainability. The report also features a section
RQ WKH GHYHORSPHQW RI QDWXUDOO\ GHULYHG PDWHULDOV LQ WKH &RORU  'LVSOD\ VHJPHQW
I found both of these examples of DIC’s efforts to anticipate change and nurturebusinesses that will underpin our transition to a decarbonized world. Trends that pose
particular threats to the chemicals industry, including rising concern regarding theissue of microplastics, were also not entirely ignored. It is fair to say that companies
will increasingly be expected to make a comprehensive statement that outlines theirawareness of key social imperatives and of the need for pertinent disclosure.
Any discussion of sustainability today must once again address the question ofwhether what needs to develop in a sustainable manner is companies or the earthand global society. In other words, which of these two is the subject of “sustainable
development?” The recognition that healthy corporate activities are not possible withouta healthy planet and a healthy society, and that continuing along the economic path
we are currently on will make it impossible to achieve a healthy planet and a healthysociety, are what led to the “Transforming Our World” subheading of the 2030 Agenda
for Sustainable Development, which was adopted in September 2015.
The Paris Agreement is a part of this transformation. In June 2019, Japan announced
a long-term growth strategy in line with the Paris Agreement that includes a goal for
reducing its greenhouse gas emissions of 80% by 2050. Accordingly, in the future
WKH',&*URXSZLOOIDFHFDOOVWRDFKLHYHDEUHDNWKURXJKRQDGLIIHUHQWOHYHOWKDQWKH
long-term target set forth in its DIC111 medium-term management plan, that is, a 30%
reduction in CO 2HPLVVLRQVIURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU²LQRWKHU
words, disruptive reform that exceeds the constraints imposed by the concepts of “earth”
DQG³VRFLHW\´)RUWKH',&*URXSDVIRURWKHUFRPSDQLHVWKLVPHDQVVKLIWLQJWRQHZ
core products and revamping its business portfolio. The section titled “A Message fromthe President” contains the statement “This underscored our recognition of the urgencyof transforming our business portfolio… and creating new businesses with the potential
to become mainstays.” This is a recognition that comes from the perspective not onlyof operating performance but also of sustainability. For this reason, I was impressedby the subsequent statement that DIC had as a result reviewed all businesses from thetwin perspectives of “social value” and “economic value” and would advance businessportfolio transformation in a manner that addresses key imperatives arising from socialchanges such as the spread of digitization and ESH-related issues, including thoseaffecting the global environment and food supplies.
   7KH ',& *URXS¶V SURXG KLVWRU\ LQFOXGHV EHFRPLQJ WKH ILUVW FRPSDQ\ WR EXLOG D
commercial cultivation facility for Spirulina and commenced sales of the blue-green
DOJDHLQ0RUHUHFHQWO\WKH*URXSKDVSURPRWHGWKHFUHDWLRQRIDSURSULHWDU\VXVWDLQDELOLW\LQGH[$FFRUGLQJO\LWLVP\VLQFHUHKRSHWKDWWKH*URXS¶VQHZGLUHFWLRQV
and organization will yield a new corporate culture that is highly sensitive to thechallenges facing earth and society and that this new culture will underpin many
concrete achievements in the years ahead.

DIC Report 2019156

111 Years of Achievement

DIC Group Milestones

1908
Established as

1957

1925

Enters the market for helmets andother molded plastic products

Begins production of organic pigments
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

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

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

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

Commences sales of the
DIC Color Guide ®

DIC’s founder, Kijuro Kawamura

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

Reichhold Chemicals’
San Francisco plant

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.

1973

Establishes theEnvironment and Safety
Response Department
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.

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

1990

Opens Kawamura
Memorial Museum of Art
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.

Actively introduces technologies
from overseas and promotes
further diversification

1995

Declares intention to uphold theprinciples of Responsible Care

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.

2006

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 2019

157

1970

1999

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.

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

Enters the multilayered films business

2008

1973

Enters 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.

Acquires Coates, the printing inks
division of France’s TOTALFINA

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

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.

DIC’s new corporate symbol

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

DIC Building

2016

Introduces branding program

Brand advertisement for television

2009

2017

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.

Concludes capital and business alliance with Taiyo Holdings Co., Ltd.,
one of the world’s leading manufacturers of solder resist for PWBs.

Establishes DIC Graphics Corporation

Sun Chemical’s headquarters

Completes
reconstructionof corporate
headquarters
in Nihonbashi

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.

Nematic LCs

1986

2015

Enters capital and business alliancewith Taiyo Holdings

1999

2010

2019

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

Develops the G58 series of green pigments for use in color filters forliquid crystal displays (LCDs), which deliver marked increases inbrightness and contrast compared with previous products andcontribute substantially to reduced energy consumption by LCDs.

Clarifies strategies for transforming the DIC Group’s businessportfolio, that is, for building a sophisticated portfolio focused on
ESH-related issues and social changes by advancing qualitativereforms in existing core businesses and creating new businesses
with the potential to become mainstays.

Succeeds in developing 100% soybean
oil–based printing ink

Seeks to advance globalization ofcore businesses and diversify into new areas

Develops groundbreaking series ofgreen pigments for LCD color filters

Launches DIC111 medium-term
management plan

Takes steps to advance environmental
protection and expands global presence

Prepares for a new phaseof growth

2007

2010

2014

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.

In December 2010, becomes a participant in
the United Nations Global Compact (UNGC),
with the aim of maintaining its reputation asa 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.”

Joins United Nations
Global Compact

2015

Changes designation to“sustainability”

In-house poster promoting sustainability initiatives

Launches CSR program

DIC Report 2019158

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.
As of 2018, has been included in theindex for four consecutive years.

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

Laboratory

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

Yokkaichi

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

Tokyo

Komaki35-58, Sakashita 3-chome, Itabashi-ku, Tokyo 174-8520, Japan
Tel: +81-3-3966-2111 Fax: +81-3-3965-4320

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

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

Art Museum
Kawamura Memorial DIC Museum of Art
631, Sakado, Sakura, Chiba 285-8505, Japan
Tel: + 81-50-5541-8600 (toll free in Japan)
Fax: +81-43-498-2139(Information is as of March 31, 2019.)

Principal Subsidiaries and Affiliates

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 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 Manufacturing Co., Ltd.
Oxirane Chemical Corp.
Renaissance, Inc.
Seiko PMC Corporation
SUNDIC Inc.
Taiyo Holdings Co., Ltd.
Techno Science, Inc.
Topic Co., Ltd.
YD Plastics 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 Advanced Materials (Shanghai)Co., Ltd.
Sun Chemical Holding (Hong Kong) Ltd.
Sun Chemical Ink LLP
Sun Chemical Saudi Arabia Ltd.
Sun Chemical Trading (Shanghai) Co., Ltd.
Suqian Lintong Chemical Science Corp.
Suzhou Lintong New Materials Co., Ltd.
TOA-DIC Zhangjiagang Chemical Co., Ltd.
Total Acrylic Polymer Industry Corp.

■ Asia and Oceania (Excluding Japan)■ Europe and Africa

Aekyung Chemical 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 GmbH
C.T. LAY S.R.L.
DIC Europe GmbHDIC Holdings Austria GmbHDIC Holdings B.V.
DIC Performance Resins GmbHECG Holdings Ltd.
Gibbon FineCal Ltd.
Glenside Properties Limited
Gwent Electronic Materials Ltd.
Hartman D.O.O.
Hartmann-Sun Chemical EOOD
Kingfisher Colours Ltd.
Lorilleux Maroc S.A.
Luminescence Holdings Ltd.
Parker Williams Design Ltd.
Sun Branding Solutions Ltd.
Sun Chemical A/SSun Chemical AB
Sun Chemical AG
Sun Chemical AG (S.A., Ltd.)Sun Chemical B.V.
Sun Chemical d.o.o.
Sun Chemical for Graphic Arts S.A.E.

■ JapanChangzhou 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.

Sun Chemical GmbHSun Chemical Group GmbHSun Chemical Group S.p.A.
Sun Chemical Holding B.V.
Sun Chemical Inks Ltd.
Sun Chemical Inks A/S
Sun Chemical Lasfelde GmbHSun Chemical Ltd.
Sun Chemical N.V./S.A.
Sun Chemical Nyomdafestek Kereskedelmi
Es Gyatro 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 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 Sp. z.o.o.
Sun Chemical Turkey
Sun Chemical Ukraine Ltd.
Sun Chemical A.O
Sun Inkjet Ceramics, S.L.
4PLATE GmbH

■ North, Central and South America
Benda-Lutz Corporation
Camus Water Technologies LLC
Cathay Deep Well Disposal LLC
Coates Brothers (Caribbean) Ltd.
DIC Imaging Products USA, LLC
Earthrise Holdings Inc.
Earthrise Nutritionals LLC
Inmobiliaria Sunchem, S.A. de C.V.
Joules Angstrom U.V. Printing Inks Corp.
Mondis Manufacturers Insurance
Company N.V.
New England Manufacturers Insurance
Corp.
Rycoline Products, LLC
SC Funding LLC
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 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.
Sun Cosmetics LLC
Tintas S.A.S.

(Information is as of March 31, 2019.)

DIC Report 2019159

DIC Report 2019
Financial Section

Year ended December 31, 2018

O ne of the world’s leading diversified chemicals companies, DIC Corporation is also the core of the DIC Group, a multinationalorganization with operations in more than 60 countries and territories worldwide. Established in 1908 as a manufacturer of printing
inks, DIC has capitalized on its extensive technologies, know-how and experience in the years since to build a broad business portfolioof materials and finished products, enabling it to provide innovative solutions to customers in diverse industries and transforming it
into a global powerhouse in its key fields of endeavor.
Now in its second century in business, DIC is redoubling its efforts to develop and market innovative, high-performance productsthat respond to the needs of customers in markets around the world, in line with its “Color & Comfort by Chemistry” vision.
A responsible corporate citizen, DIC is also committed to helping realize environmental and social sustainability.

The DIC WAY• Mission
Through constant innovation, the DIC Group strives to create enhanced value and tocontribute to sustainable development for its customers and society.

• Vision
Color & Comfort by Chemistry• Spirit
Drive
The force that propels our employees to think and take action
Integrity
Maintaining a moral attitude, and facing mattershead-on with reason and a sense of responsibility
Dedication
Having a sense of ownership and ambition, and taking
a passionate approach to the tasks at hand
Collaboration
Working to resolve matters by rallying the collective powerof the global DIC Group, while respecting the individuality and diversity of each and every one of our employees
Harmony
Fulfilling our social responsibility as good corporate citizens, and always remaining conscious of compliance issues

Contents

Consolidated Five-Year Summary 1
Management’s Discussion and Analysis 2
Consolidated Balance Sheet 5
Consolidated Statement of Income 7
Consolidated Statement of Comprehensive Income 8
Consolidated Statement of Changes in Net Assets 9
Consolidated Statement of Cash Flows 10
Notes to the Consolidated Financial Statements 11
Management’s Report on Internal Control 40
Independent Auditor’s Report 41
Investor Information and Corporate Data 43

1Consolidated Five-Year Summary
DIC Corporation and Consolidated Subsidiaries
Years ended December 31, 2018 to 2014

Thousands of
U.S. dollars,
except for per
share information(Note 7)
Dec. 2018

Dec. 2018

Dec. 2017

Millions of yen,
except for per share information
Dec. 2016
Dec. 2015
Dec. 2014

Net sales
Percent increase (decrease)
Operating income
Net income attributable to owners of
the parent¥805,498
2.0%
48,385¥789,427
5.1%
56,483¥751,438(8.4)%
54,182¥819,999(1.2)%
51,068¥830,078—%
41,076$7,322,709
2.0%
439,864

32,02838,60334,76737,39425,194291,164

Equity (Note 3)
Total assets

298,896805,486

315,129
831,756

278,535
764,828

262,467
778,857

249,749
803,7032,717,236
7,322,600¥3,158.05
338.40¥3,329.60
407.56¥2,938.12
366.72¥2,768.41
389.40¥ 259.63
26.78$28.713.08

125.00120.00

64.00

8.00

6.00

1.14

36.4%
12.9%

33.7%
14.6%

31.1%
11.3%

37.1%
10.4%

Equity per share (Notes 1, 4 and 6)
Earnings per share (basic) (Notes 2, 4 and 6)
Cash dividends per share applicable tothe period (Note 5)
Equity ratio to total assets
ROE (return on equity)

37.1%
10.4%

Number of employees

37.9%
13.0%

20,62020,62820,481

20,264

20,411

20,620Notes: 1. The computation of equity per share has been based on the number of shares issued as of the balance sheet date.
2. The computation of earnings per share has been based on the weighted-average number of shares issued during each fiscal year.
3. Equity comprises “Total shareholders’ equity” and “Total accumulated other comprehensive income.”
4. The Company implemented a consolidation of shares of common stock by a factor of 10 to 1 with July 1, 2016, as the effective date. Earnings per share (basic)
and equity per share are calculated respectively based on the assumption that the consolidation had been implemented at the beginning of the fiscal year ended
December 31, 2015.
5. The Company implemented a consolidation of shares of common stock by a factor of 10 to 1 with July 1, 2016, as the effective date. Cash dividends per share
applicable to the period for the fiscal year ended December 31, 2016, comprises interim dividends of ¥4.00 (before the consolidation) and year-end dividends of¥60.00 (after the consolidation). If the consolidation had been taken into consideration, cash dividends per share applicable to the period for the fiscal year ended
December 31, 2016, would be ¥100.00.
6. From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The shares held by the trust are recorded under net assets
as treasury shares. The number of treasury shares excluded from the number of shares issued as of the balance sheet date used for the calculation of equity pershare includes the number of shares held by the trust. The number of treasury shares excluded from the weighted-average number of shares issued during the
fiscal year used for the calculation of earnings per share includes the number of shares held by the trust.
7. Yen amounts have been translated, for readers’ convenience only, at the rate of ¥110 to US$1, the approximate rate of exchange at December 31, 2018.

Net Sales(Billions of yen)
1,000.0

Operating Income

ROE(Billions of yen)

(%)

75.0

830.1 820.0
751.4

800.0

20.0

789.4 805.5
60.0

51.1

54.2

56.5

41.1

600.0

45.0

400.0

30.0

8.0

200.0

15.0

4.0

0.0

Dec.
2014

Dec.
2015

Dec.
2016

Dec.
2017

Dec.
2018

Net Income Attributable to Owners of the Parent(Billions of yen)
50.0

37.4

38.6
34.8

Dec.
2014

12.0

Dec.
2015

Dec.
2016

Dec.
2017

0.0

Dec.
2018

Dec.
2016

30

60

65

Dec.
2017

Dec.
2018

0

40

30.0

Dec.
2014

27.3
22.4

29.4

20.5

20.0

30
30

Dec.
2018

36.9

40.0

60

10.0

Dec.
2017

50.0

120

60

Dec.
2016

Dec.
2015

(%)

90

Dec.
2015

Dec.
2014

32.0

25.2

Dec.
2014

10.4

Dividend Payout Ratio

End of 2nd quarter
Year-end

13.0

11.3

(Yen)

20.0

0.0

12.9

Cash Dividends per Share
150

40.0

30.0

0.0

14.6

16.0

48.4

40

40

Dec.
2015

Dec.
2016

60

60

Dec.
2017

Dec.
2018

* These figures have been adjusted to account for the impactof a consolidation of shares of common stock by a factor of
10 to 1 with July 1, 2016, as the effective date.

10.0

0.0

Dec.
2014

Dec.
2015

Dec.
2016

Dec.
2017

Dec.
2018

2

Management’s Discussion and Analysis

This document presents consolidated results for fiscal year 2018, comprising the accounts for the year ended December 31, 2018, of DIC and its domestic and overseas subsidiaries.

OperatingResults

Economic conditions worldwide recovered gradually in fiscal year 2018, although signs of weakness wereseen in certain areas. Moderate recovery persisted in North America and Europe. In Asia, economic conditions
picked up slowly in Southeast Asia and India, despite slowing in the People’s Republic of China (PRC). Japan’s
economy rallied steadily.
In this environment, consolidated net sales increased 2.0%, to ¥805.5 billion, reflecting multiple factors,
including the revision of sales prices and firm shipments. Operating income declined 14.3%, to ¥48.4 billion,
hampered by rising raw materials prices, higher distribution costs and the depreciation of currencies in European emerging economies, among others. Ordinary income was down 14.5%, to ¥48.7 billion, with causes including lower operating income. Net income attributable to owners of the parent fell 17.0%, to ¥32.0 billion.
Reasons behind this result included the decrease in ordinary income.

Net sales
Operating income
Ordinary income
Net income attributable to owners of the parent

Average exchange rate (¥/US$)
Average exchange rate (¥/EUR)

Segment
Results

FY2018Billions of yen
FY2017

Change (%)

Change calculated inlocal currency (%)¥805.5
48.4
48.7
32.0

¥789.4
56.5
57.0
38.6

2.0%
(14.3)(14.5)(17.0)

3.3%(11.4)——FY2018Yen
FY2017¥110.46130.46¥112.33
127.03

Segment results in key markets are as follows. Year-on-year percentage changes excluding the impact of foreign currency fluctuations are presented as “change calculated in local currency.” Interregional transactions
within the Printing Inks segment are included. Accordingly, the aggregates of regional net sales and operating
income figures for the Printing Inks segment differ from the figures presented in the Notes to the Consolidated
Financial Statements.

Printing Inks
Japan
Sales in Japan declined, a consequence of diminished demand for publishing inks, among others. Operating
income fell sharply, owing to the aforementioned sales results, as well as to rising raw materials prices, higher
distribution costs and other factors.
The Americas and Europe
Although sales of packaging inks rose, sales in North America edged down, owing to waning demand for
publishing inks and news inks. In Europe, sales increased, boosted by brisk shipments of packaging inks. Sales
in Central and South America were up in all product categories. As a result, overall sales in the Americas andEurope advanced, underpinned by an increase in sales of packaging inks, among others. Despite rising in local
currency terms, reflecting the aforementioned sales results and expanded sales of security inks, operating income was down after translation owing to the depreciation of currencies in emerging economies, including theTurkish lira.

3Management’s Discussion and Analysis

Asia and Oceania
Higher shipments of packaging inks and publishing inks bolstered sales in the PRC and Southeast Asia. Sales in
Oceania fell, with causes including fading demand for publishing inks and news inks. Sales in India increased
in all product categories. For these reasons, overall sales in Asia and Oceania advanced. Operating income
decreased significantly, regardless of the aforementioned sales results, a consequence of rising raw materials
prices and other factors.

Japan
The Americas and Europe
Asia and Oceania

Net sales
Operating income
Net sales
Operating income
Net sales
Operating income

Billions of yen
FY2018Change (%)

Change calculated inlocal currency (%)¥ 74.4
1.8
247.2
8.8
67.6
3.2

(3.6)%(53.4)
2.5
(7.7)
4.3
(19.8)

—%
—
6.1
9.3
7.1
(18.6)

Fine Chemicals
Sales of pigments were down, despite an increase in shipments of pigments for color filters and effect pigments, among others. Reasons behind this result included a lull in shipments of pigments for cosmetics andflagging demand for other pigments. Sales of thin-film transistor liquid crystals (TFT LCs) fell, with reasons including falling sales prices. As a consequence, segment sales declined. Owing to the aforementioned sales results, as well as to the impact of environmental regulations in the PRC, segment operating income decreased.

Net sales
Operating income

Billions of yen
FY2018Change (%)

Change calculated inlocal currency (%)¥132.3
16.4(2.3)%(5.5)(1.8)%(5.9)

Polymers
Sales of epoxy resins and other products for electronic and electrical equipment advanced both in Japan andoverseas. In addition, the revision of sales prices progressed. For these and other reasons, segment sales rose.
Segment operating income declined, notwithstanding the aforementioned sales results. Factors behind this result included the fact that efforts to revise sales prices failed to keep up with rising raw materials prices.

Net sales
Operating income

Billions of yen
FY2018Change (%)

Change calculated inlocal currency (%)¥205.817.5

4.0%(10.6)

3.8%(10.7)

Compounds
Shipments of polyphenylene sulfide (PPS) compounds and jet inks expanded steadily. Nonetheless, segment
sales were up only slightly, owing to the scaling back of low-margin businesses and other factors. Segment operating income fell sharply. This was attributable to a one-time cost increase associated with the scaling backof low-margin businesses, as well as to rising raw materials prices, among others.

Net sales
Operating income

Billions of yen
FY2018Change (%)

Change calculated inlocal currency (%)

¥65.2
3.2

0.8%
(35.4)

0.9%(35.7)

4

Management’s Discussion and Analysis

Application Materials
Segment sales increased, reflecting higher shipments of high-value-added products such as coextruded multilayer films and hollow-fiber membrane modules, among others. Segment operating income rose substantially.
Reasons behind this result included the aforementioned sales results.

Net sales
Operating income

Analysis ofCash Flows

Billions of yen
FY2018Change (%)

Change calculated inlocal currency (%)

¥58.5
3.2

4.3%
23.0

4.1%
22.4

Cash and cash equivalents as of December 31, 2018, totaled ¥18.6 billion, an increase of ¥1.0 billion from theprevious fiscal year-end.
Operating Activities
Net cash provided by operating activities amounted to ¥51.0 billion, down from ¥54.2 billion provided by suchactivities in fiscal year 2017. Income before income taxes and non-controlling interests was ¥48.8 billion, while
the adjustment for depreciation and amortization amounted to ¥32.8 billion. Income taxes paid totaled ¥13.1
billion, while working capital increased ¥3.7 billion.
Investing Activities
Net cash used in investing activities came to ¥38.4 billion, down from ¥58.9 billion used in such activities in theprevious fiscal year. A total of ¥11.5 billion was applied to the purchase of shares and investments in capital ofsubsidiaries resulting in change in scope of consolidation. In contrast, proceeds from sales and redemption of
investment securities came to ¥4.2 billion. Capital expenditure amounted to ¥32.1 billion.
Financing Activities
Net cash used in financing activities amounted to ¥11.8 billion, compared with ¥11.4 billion provided by suchactivities in fiscal year 2017. The net total of funds procured was ¥1.7 billion, while cash dividends paid totaled¥11.4 billion.

5

Consolidated Balance SheetDIC Corporation and Consolidated Subsidiaries
December 31, 2018

Assets

2018

Millions of yen
2017

Cash and deposits (Notes 6, 11 and 19)¥ 19,782¥ 17,883

Notes and accounts receivable—trade (Notes 11, 19 and 20)

209,763

226,968

Merchandise and finished goods (Note 11)

94,61190,010Work in process (Note 11)

9,403

9,053

Raw materials and supplies (Note 11)61,937

58,911

Deferred tax assets (Note 16)

8,891

9,574

Other (Note 19)

23,87823,340Allowance for doubtful accounts(9,722)(10,763)

418,543424,976

Buildings and structures

88,892

92,443

Machinery, equipment and vehicles

70,951

70,554Tools, furniture and fixtures

11,395

11,129Land

48,98550,307

Construction in progress

7,928

7,244

228,151

231,677

Goodwill

34

199

Software

2,887

3,837

Customer-related assets

3,359

874

Other

7,502

2,674

13,782

7,584

Investment securities (Notes 7, 8 and 19)

67,52376,867

Deferred tax assets (Note 16)

28,612

31,871

Net defined benefit asset (Note 12)25,08933,408Other (Notes 7 and 19)

23,947

26,858(161)(1,485)

Total investments and other assets

145,010

167,519

Total non-current assets

386,943406,780

Total assets¥805,486¥831,756

Current assets:

Total current assets

Non-current assets:
Property, plant and equipment (Notes 9, 10 and 11):

Total property, plant and equipment

Intangible assets:

Total intangible assets

Investments and other assets:

Allowance for doubtful accounts

See notes to the consolidated financial statements.

6

Consolidated Balance Sheet

Liabilities andNet Assets

2018

Millions of yen
2017¥118,554¥117,199

Short-term loans payable (Notes 11 and 19)

29,986

61,385Current portion of long-term loans payable (Notes 11, 19 and 20)

49,792

27,677

Current liabilities:
Notes and accounts payable—trade (Notes 19 and 20)

Lease obligations (Notes 11 and 19)
Income taxes payable (Notes 16 and 19)
Deferred tax liabilities (Note 16)
Provision for bonuses
Other (Note 19)
Total current liabilities

667

557

2,843

4,793

325

399

6,283

7,071

47,47647,509255,926

266,590

Non-current liabilities:
Bonds payable (Notes 11, 19 and 20)

60,00050,000Long-term loans payable (Notes 11, 19 and 20)

119,791

122,017

Lease obligations (Notes 11 and 19)

4,229

4,045

Deferred tax liabilities (Note 16)

6,672

11,653Net defined benefit liability (Note 12)20,51922,774

Asset retirement obligations

1,482

1,329

Other

9,533

9,397

Total non-current liabilities

222,226

221,215

Total liabilities

478,152

487,805

96,55796,557

Net assets:
Shareholders’ equity (Notes 13 and 23):
Capital stock (Note 14)
Capital surplus

94,44594,445Retained earnings

207,421

186,768

Treasury shares (Note 15)(1,823)(1,828)

Total shareholders’ equity

396,600

375,942

1,407

7,874

14

(3)

Foreign currency translation adjustment(67,617)(46,462)

Remeasurements of defined benefit plans (Note 12)

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(31,508)(22,222)

Total accumulated other comprehensive income(97,704)(60,813)

Non-controlling interests

28,43828,822

Total net assets

327,334

343,951

Total liabilities and net assets¥805,486¥831,756

7

Consolidated Statement of Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 20182018

Millions of yen
2017

Net sales
Cost of sales
Gross profit¥805,498
629,850
175,648¥789,427
605,809
183,618

Selling, general and administrative expenses (Note 17)
Operating income

127,263
48,385

127,135
56,483Non-operating income:Interest income
Dividends income
Equity in earnings of affiliates
Other
Total non-operating income

3,781
425
3,845
1,631
9,682

1,817
447
4,069
2,019
8,352

Non-operating expenses:
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses

5,114
828
3,423
9,365

3,565
1,456
2,854
7,875

Ordinary income

48,70256,960Extraordinary income:Gain on sales of investment securities
Gain on sales of subsidiaries and affiliates securities
Gain on sales of non-current assets
Insurance income
Gain on change in equity
Total extraordinary income

3,270
679
431
237
—
4,617

—
315
1,156
—
641
2,112

Extraordinary loss:
Loss on disposal of non-current assets
Severance costs
Loss on disaster
Early termination fee
Impairment loss (Note 10)
Total extraordinary loss

2,535
1,539
409
—
—
4,483

2,682
951
—
376
234
4,243

48,83654,82911,015
4,019
15,034

10,517
3,388
13,90533,802
1,774¥ 32,028

40,9242,321¥ 38,603

Income before income taxes and non-controlling interests
Income taxes (Note 16):
Income taxes—current
Income taxes—deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

Yen

Earnings per share (Note 2):
Basic
DilutedWeighted-average number of shares issued during the period,
excluding treasury shares (in thousands)
Cash dividends per share applicable to the period (Note 2)
See notes to the consolidated financial statements.

¥ 338.40—¥ 407.56—

94,647

94,717¥ 125.00¥ 120.00

8

Consolidated Statement of Comprehensive Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 20182018

Millions of yen
2017¥ 33,802¥40,924(6,502)

2,590

17

183

Foreign currency translation adjustment(20,203)979

Remeasurements of defined benefit plans, net of tax (Note 12)(9,413)

4,718

Share of other comprehensive income of associates accounted for using
equity method(1,545)

1,563¥(37,646)¥10,033¥ (3,844)¥50,957¥ (4,863)¥48,234

1,019

2,723

Net income
Other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total other comprehensive income (Note 22)
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests
See notes to the consolidated financial statements.

9Consolidated Statement of Changes in Net Assets
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2018

Millions of yen
Shareholders’ equity

Balance at January 1, 2017
Dividends from surplus,¥120.00 per share (Note 13)
Net income attributable to owners of
the parent
Purchase of treasury shares—
155,741 shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity (Notes 8 and 13)
Balance at December 31, 2017
Dividends from surplus,¥120.00 per share (Note 13)
Net income attributable to owners of
the parent
Purchase of treasury shares—
2,642 shares
Disposal of treasury shares—
3,900 shares
Net changes of items other thanshareholders’ equity (Notes 8 and 13)
Balance at December 31, 2018

Issuednumber ofcommon stock(thousands)

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity95,157¥96,557¥94,094¥ 159,541¥(1,213)¥ 348,979(11,376)(11,376)

38,60338,603(615)

351

95,157

95,15796,557¥96,557

94,445¥94,445(615)
351

186,768(1,828)375,942(11,375)(11,375)

32,02832,028¥ 207,421

(10)

(10)

15

15

¥(1,823)¥ 396,600
Millions of yen

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Deferred gains
or losses onhedges¥ 5,248¥(187)

Balance at January 1, 2017
Dividends from surplus,¥120.00 per share (Note 13)
Net income attributable to owners of
the parent
Purchase of treasury shares—
155,741 shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity (Notes 8 and 13)
Balance at December 31, 2017
Dividends from surplus,¥120.00 per share (Note 13)
Net income attributable to owners of
the parent
Purchase of treasury shares—
2,642 shares
Disposal of treasury shares—
3,900 shares
Net changes of items other thanshareholders’ equity (Notes 8 and 13)
Balance at December 31, 2018
See notes to the consolidated financial statements.

Foreigncurrency Remeasurements
translationof definedadjustment
benefit plans¥(48,626)¥(26,879)

Total
accumulated
othercomprehensive
incomeNon-controllinginterests

Total
net assets¥(70,444)¥28,482¥ 307,017(11,376)
38,603
(615)
351

2,626
7,874

184
(3)

2,164
(46,462)

4,657(22,222)

9,631(60,813)340
28,822

9,971
343,951(11,375)
32,028(10)
15(6,467)¥ 1,407¥17
14(21,155)¥(67,617)(9,286)¥(31,508)(36,891)¥(97,704)(384)¥28,438(37,275)¥ 327,334

10Consolidated Statement of Cash FlowsDIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2018

Net cash provided by (used in) operating activities:
Income before income taxes and non-controlling interests
Adjustments for:
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Interest and dividends income
Equity in (earnings) losses of affiliates
Interest expenses
Loss (gain) on sales and retirement of non-current assets
Impairment loss
Loss (gain) on sales of subsidiaries and affiliates securities
Loss (gain) on sales of investment securities
Decrease (increase) in notes and accounts receivable—trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable—trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of shares and investments in capital of subsidiaries resulting in change
in scope of consolidation
Proceeds from shares and investments in capital of subsidiaries resulting inchange in scope of consolidation
Purchase of subsidiaries and affiliates securities
Proceeds from sales of subsidiaries and affiliates securities
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments for transfer of business
Other, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Cash dividends paid
Cash dividends paid to non-controlling interests
Net decrease (increase) in treasury shares
Purchase of shares and investments in capital of subsidiaries that does not resultin change in scope of consolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period (Note 6)
Cash and cash equivalents at end of the period (Note 6)
See notes to the consolidated financial statements.

2018

Millions of yen
2017¥ 48,836¥ 54,829

32,825
156
(263)
(782)
(4,206)(3,845)
5,114
2,104
—
(679)
(3,270)
6,897(14,516)
3,966(9,524)62,813
6,307(5,050)(13,080)
50,99031,524345(720)
13(2,264)(4,069)
3,565
1,526
234
(315)
—
(7,070)(9,742)
9,328(11,246)
65,9384,180(3,628)(12,294)
54,196(3,832)
2,893(31,343)
1,336
(741)

(8,231)
8,560(32,192)
2,103(1,392)(11,524)

(515)

679
(157)
671
(509)
4,150
(690)
679
(38,388)—(27,209)
—
(851)
465
(338)
662
(58,938)(29,689)
60,627(39,204)
10,000(11,375)(1,348)5

9,272
44,823(48,022)
20,000(11,376)(1,439)
(615)

(62)
(735)
(11,781)159
980
17,651¥ 18,631

(578)
(690)
11,375(5,653)980
16,671¥ 17,651

11

Notes to the Consolidated Financial Statements
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2018

Note 1:
Basis ofPresenting
Financial
Statements

The accompanying consolidated financial statements have been prepared in accordance with the provisions
set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, andin accordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements of the International Financial Reporting Standards (“IFRS”).
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been
made to the consolidated financial statements issued domestically in order to present them in a form which ismore familiar to readers outside Japan. The consolidated financial statements are stated in Japanese yen, thecurrency of the country in which DIC Corporation (the “Company”) is incorporated.

Note 2:
Summary of
Significant
Accounting
Policies

Consolidated financial statements
Under the control or influence concept, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated and those companies over which the Company has theability to exercise significant influence are accounted for by the equity method.
The consolidated financial statements include the accounts of the Company and its significant subsidiaries:
Sun Chemical Group Coöperatief U.A., DIC (CHINA) CO., LTD., DIC Asia Pacific Pte Ltd, SEIKO PMC CORPORATION, DIC INVESTMENTS JAPAN, LLC., DIC Graphics Corporation and 141 other companies in the fiscal year
ended December 31, 2018 (138 other companies in the fiscal year ended December 31, 2017). All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within the Company and its consolidated subsidiaries (the“Group”) is eliminated.
Investments in 26 affiliates in the fiscal year ended December 31, 2018 (26 in the fiscal year ended December 31, 2017), are accounted for by the equity method.
Accounting period of consolidated subsidiaries
The closing date of the consolidated subsidiaries is the same as the consolidated closing date.
Cash and cash equivalents
Cash and cash equivalents consist primarily of cash on hand, certificates of deposit and short-term investmentswith original maturities of three months or less that are readily convertible to known amounts of cash andhave insignificant risk of changes in value.
Investment securities
Investment securities are classified and accounted for, depending on management’s intent, into available-forsale securities. Available-for-sale securities are carried at fair value as of the balance sheet date, with unrealized
gain and loss, net of applicable taxes, reported in a separate component of net assets. Available-for-sale securities whose fair values are not readily available are carried at cost. The cost of securities sold is calculated by themoving-average method.
Allowance for doubtful accounts
Allowance for doubtful accounts of the Company and its domestic consolidated subsidiaries is provided mainly
based on historical experience for normal receivables and on an estimate of collectability of receivables fromcompanies in financial difficulty.
Allowance for doubtful accounts of foreign consolidated subsidiaries is provided mainly based on an estimate of collectability of receivables.
Inventories
Inventories are principally stated at cost, cost being determined by the FIFO method, which evaluates the amountof the inventories shown in the balance sheet by writing them down based on their decrease in profitability.
Property, plant and equipment (excluding leased assets)
Property, plant and equipment are carried at cost. Significant renewals and additions are capitalized; maintenance and repairs, and minor renewals and improvements, are charged to income as incurred.
Depreciation of buildings (other than facilities attached to buildings) of the Company and its domestic consolidated subsidiaries is calculated principally by the straight-line method. Besides, depreciation of facilities

12

Notes to the Consolidated Financial Statements

attached to buildings and structures acquired on or after April 1, 2016, is also calculated by the straight-line
method. Other property, plant and equipment are calculated by the declining-balance method.
Depreciation of property, plant and equipment of foreign consolidated subsidiaries is calculated principally by
the straight-line method. The range of useful lives is principally from 8 to 50 years for buildings and structuresand from 3 to 11 years for machinery, equipment and vehicles.
Intangible assets (excluding leased assets)
Intangible assets are carried at cost less accumulated amortization, and are amortized by the straight-line
method. Goodwill is amortized by the straight-line method over a reasonable period not exceeding 20 years.
Leased assets
For the Company and its domestic consolidated subsidiaries, leased assets related to finance leases that do nottransfer ownership of the leased property to the lessee are depreciated on a straight-line basis, with the lease
periods used as their useful lives and no residual value.
Foreign consolidated subsidiaries account for lease transactions in accordance with either the accounting
principles generally accepted in the United States (“U.S. GAAP”) or IFRS.
Retirement and pension plans
Net defined benefit assets/liabilities are recognized for employees’ and executive officers’ retirement benefits.
Pension assets are deducted from retirement benefit obligations and the net amount is recognized based on
the estimated amount of payment as of the balance sheet date. In calculating retirement benefit obligations,the Company applies a method of attributing expected retirement benefits to each period on a benefit formulabasis. The Company and its domestic consolidated subsidiaries amortize actuarial gains and losses in the succeeding years primarily by the straight-line method over stated years that do not exceed the average remaining
service period of the eligible employees (14 to 16 years). Past service costs are amortized in the accounting periods when they accrue.
Foreign consolidated subsidiaries amortize actuarial gains and losses in the succeeding years primarily by thestraight-line method over stated years that do not exceed the average remaining service period of the eligible
employees (8 to 28 years). Past service costs are amortized over 2 to 28 years.
Unrecognized actuarial gains and losses and unrecognized past service costs are recorded in “Remeasurements of defined benefit plans” in net assets after adjusting income tax effect.
Asset retirement obligations
The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future
asset retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate canbe made. If a reasonable estimate of the asset retirement obligation cannot be made in the period in which
the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate of theasset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by theamount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation
over the remaining useful life of the asset. Over time, the liability is accreted to its present value each period.
Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows arereflected as an increase or a decrease in the carrying amount of the liability and the capitalized amount of therelated asset retirement cost.
Income taxes
The provision for income taxes is computed based on the pretax income (loss) included in the consolidated
statement of income.
Deferred income taxes are recorded to reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferredtaxes are measured by applying currently enacted tax laws to the temporary differences.
Research and development costs
Research and development costs are charged to income as incurred.

13

Notes to the Consolidated Financial Statements

Basis of translation of financial statements of foreign consolidated subsidiaries
The financial statements of foreign consolidated subsidiaries included in the consolidated financial statements
are translated into Japanese yen based on the following procedures:(1) Assets and liabilities of foreign consolidated subsidiaries are translated into Japanese yen at the exchange
rates as of the balance sheet date.
(2) Income and expenses are translated into Japanese yen at the average rate during the year.
The differences of translation are included in foreign currency translation adjustment and non-controlling interests, which are presented as separate components of net assets.
Translation of foreign currency accounts
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the exchange
rates as of the balance sheet date and any difference arising from the translation is recognized in the consolidated statement of income if hedge accounting is not applied.
Derivatives and hedging activities
To hedge risks associated with the fluctuations of exchange rates, interest rates and commodity prices, theGroup uses foreign currency forward contracts, currency options and swaps, interest rate swaps and commodity swaps. To hedge a part of the risks associated with the fluctuations of exchange rates for net investments
in foreign entities, the Company uses loans denominated in foreign currencies. The Group does not enter into
derivatives for trading or speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted for as follows:
1) all derivatives are recognized as either assets or liabilities and measured at fair value, with gains or losses
recognized in the consolidated statement of income and 2) for derivatives used for hedging purposes,
if derivatives qualify for hedge accounting because of high correlation and effectiveness between thehedging instruments and the hedged items, gains or losses on derivatives are deferred until maturity of thehedged transactions.
Receivables and payables denominated in foreign currencies are translated at the contracted rates if theforward contracts qualify for hedge accounting. Gains and losses related to qualifying hedges of firm commitments or anticipated transactions are deferred and recognized in income when the hedged transaction occurs.
If interest rate swaps qualify for hedge accounting and meet certain specific matching criteria, they will not bemeasured at market value, rather the differential paid or received under the swaps will be recognized in interest expenses or interest income.
Per share information
Earnings per share (basic) is computed by dividing net income attributable to owners of the parent available tocommon shareholders by the weighted-average number of shares issued for the period, retroactively adjusted
for stock splits.
The Company implemented a consolidation of shares of common stock by a factor of 10 to 1 with July 1,
2016, as the effective date. Earnings per share (basic) is calculated based on the assumption that the consolidation had been implemented at the beginning of the fiscal year ended December 31, 2016.
Earnings per share (diluted) reflects the potential dilution that could occur if securities were exercised or converted into common stock. Earnings per share (diluted) assumes full conversion of the outstanding convertible
notes and bonds at the beginning of the year (or at the time of issuance) with an applicable adjustment for
related interest expense, net of tax, and full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends
applicable to the respective years, including dividends to be paid after the end of the year.
Cash dividends per share applicable to the period for the fiscal year ended December 31, 2016, comprises
interim dividends of ¥4.00 (before the consolidation) and year-end dividends of ¥60.00 (after the consolidation). If the consolidation had been taken into consideration, cash dividends per share applicable to the period
for the fiscal year ended December 31, 2016, would be ¥100.00.
From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The
shares held by the trust are recorded under net assets as treasury shares. The number of treasury shares excluded from the number of shares issued as of the balance sheet date used for the calculation of equity per shareincludes the number of shares held by the trust. The number of treasury shares excluded from the weightedaverage number of shares issued during the fiscal year used for the calculation of earnings per share includes
the number of shares held by the trust.

14

Notes to the Consolidated Financial Statements

Note 3:
Changes in
Presentation(Consolidated
Balance Sheet)

Under “Intangible assets,” “Customer-related assets,” which was previously included in “Other,” is now presented separately from the fiscal year ended December 31, 2018, owing to its increased financial materiality.
To reflect this change, ¥3,548 million presented as “Other” under “Intangible assets” in the consolidatedbalance sheet of the previous fiscal year has been reclassified, with ¥874 million presented as “Customerrelated assets” and ¥2,674 million presented as “Other.”

Note 4:
New Accounting
Pronouncements

Implementation Guidance on Tax Effect Accounting• “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, revised on February 16, 2018)• “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, revised on
February 16, 2018)(1) Overview
Implementation Guidances have been reviewed and amended at the following points, deemed necessary intransferring the control over the practical guidelines for tax effect accounting from the Japanese Institute ofCertified Public Accountants (“JICPA”) to the Accounting Standards Board of Japan (ASBJ), basically following
their contents.
(Main accounting treatments reviewed and amended)• Treatments for taxable temporary differences for investments in subsidiaries within the context of nonconsolidated financial statements• Treatments in determining recoverability of deferred tax assets in a company which was categorized as‘Type 1’ according to the guidance(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt these revised implementation guidancesfrom the beginning of the fiscal year ending December 31, 2019.
(3) Impact of the adoption of the revised implementation guidances
The Company is in the process of measuring the effects of applying these revised implementation guidances infuture applicable periods.
Accounting Standard for Revenue Recognition• “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, issued on March 30, 2018)• “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30,
issued on March 30, 2018)(1) Overview
The International Accounting Standard Board (“IASB”) and the Financial Accounting Standard Board (“FASB”)
jointly developed a comprehensive accounting standard for revenue recognition and issued “Revenue fromContracts with Customers” in May 2014 (IFRS 15 by IASB, and ASU 2014-09 by FASB).
IFRS 15 was applied for annual reporting periods beginning on or after January 1, 2018, and ASU 2014-09
was also applied from annual reporting periods beginning after December 15, 2017. Based on such a situation,
the ASBJ developed the comprehensive accounting standard for revenue recognition and the implementation
guidance and issued them together.
The basic objective of the ASBJ in developing the accounting standards regarding revenue recognition, wasto enhance comparability between financial statements, which is one of the points of convenience of interfacing with IFRS 15. Accordingly, the accounting standard fundamentally incorporates the basic policies of IFRS
15. Also, where there are items that should be considered to reflect the business practices in Japan, alternative
policies will be added to the extent that comparability is not lost.
(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt the issued accounting standard and implementation guidance from the beginning of the fiscal year ending December 31, 2022.

15

Notes to the Consolidated Financial Statements(3) Impact of the adoption of the accounting standard and implementation guidance
The Company is in the process of measuring the effects of applying the accounting standard and implementation guidance in future applicable periods.

IFRS 16 Leases
ASU 2016-02 Leases(1) Overview
The IASB issued IFRS 16 Leases, concurrently with the introduction of ASU 2016-02 into the FASB’s Accounting Standards Codification. These accounting standards require lessees to recognize a right-of-use asset and alease liability in the statement of financial position. There are no significant changes for lessors in theseaccounting standards.
(2) Date of adoption
Foreign consolidated subsidiaries will adopt IFRS 16 from the beginning of the fiscal year ending December 31,
2019, and ASU 2016-02 from the beginning of the fiscal year ending December 31, 2020.
(3) Impact of the adoption of the accounting standards
The Company is in the process of measuring the effects of applying the accounting standards in future applicable periods.

Note 5:Additional
Information

Board Benefit Trust (BBT)
With regard to the compensation for executive officers, as well as directors who concurrently serve as executive
officers (the “Target Officers”), the Company introduced a performance-based stock compensation plan called
Board Benefit Trust (BBT) (the “Plan”) from the fiscal year ended December 31, 2017. The purpose of the Plan
is to further clarify the linkage between the compensation of the Target Officers, and corporate performanceand the value of the Company’s shares. The intended result is strengthening the Target Officers’ awareness of
their contributions to the medium- to long-term improvement of corporate performance and value.
Accounting treatment related to the trust agreement is in accordance with “Practical Solution on Transactionsof Delivering the Company’s Own Stock to Employees etc. through Trusts” (PITF No. 30, March 26, 2015).
(1) Outline of the transactions
The trust established under the Plan acquires the Company’s shares by cash contributed by the Company. The
trust provides shares of the Company and the cash equivalent to the market price of the shares of the Company (the “Company’s Shares and Cash Benefits”) to the Target Officers, in accordance with the Rules of Officer
Share Benefit established by the Company. The Target Officers shall in principle receive the Company’s Shares
and Cash Benefits upon their retirement.
(2) The Company’s shares remaining in the trust
The shares remaining in the trust are recorded under net assets as treasury shares at the book value in the trust(excluding incidental costs). The book value and the number of such treasury shares are ¥584 million and 148
thousand as of December 31, 2018, and ¥599 million and 152 thousand as of December 31, 2017, respectively.

Note 6:
Cash and Cash
Equivalents

Cash and cash equivalents as of December 31, 2018 and 2017, include the following:

Cash and deposits
Less: time deposits and short-term investments which mature over three months after
the date of acquisition
Cash and cash equivalents

2018

Millions of yen
2017¥19,782¥17,883(1,151)(232)¥18,631¥17,651

16

Notes to the Consolidated Financial Statements

Note 7:
Investments in
Unconsolidated
Subsidiaries andAffiliates

Investments in unconsolidated subsidiaries and affiliates as of December 31, 2018 and 2017, include the following:

Investments in stock of unconsolidated subsidiaries and affiliates
Investments in equity of unconsolidated subsidiaries and affiliates
Total

2018

Millions of yen
2017¥53,498¥53,213

1,053

1,053

¥54,551¥54,266

Note 8:Investment
Securities

The carrying amounts and aggregate fair values of available-for-sale securities at December 31, 2018 and2017, are as follows:
Millions of yen
2018
Cost

Unrealized
gains

Unrealized
lossesFair value

Stocks¥8,338¥2,865¥(718)¥10,485

Total¥8,338¥2,865¥(718)¥10,485

Available-for-sale securities:

Millions of yen
2017
Cost

Unrealized
gains

Unrealized
lossesFair value

Stocks¥8,121¥11,437¥(21)¥19,537

Total¥8,121¥11,437¥(21)¥19,537

Available-for-sale securities:

Proceeds from sales of investment securities for the year ended December 31, 2018, are ¥4,150 million.
Gross realized gains on these sales, computed on the moving-average cost basis, are ¥3,270 million for theyear ended December 31, 2018.

Note 9:Property, Plant
and Equipment

Accumulated depreciation on property, plant and equipment as of December 31, 2018 and 2017, is ¥555,347
million and ¥559,793 million, respectively.

Note 10:
Impairmentof Long-Lived
AssetsThere was no impairment loss of long-lived assets for the fiscal year ended December 31, 2018.
Impairment losses on long-lived assets for the fiscal year ended December 31, 2017, for each asset groupare as follows:
Millions of yen
2017
Used status

Factory assets in use
Idle assets

Category of assets

Machinery, equipment and vehicles,
buildings and structures, and other
Buildings and structures, machinery,equipment and vehicles, and other

Total

Location

Allocated impairment loss

India

¥200

Ibaraki, Japan

34
¥234

The carrying amount of the factory assets in use was reduced to its recoverable amount because the recoverable amount is less than the carrying amount. The carrying amount of the idle assets was also reduced to its
recoverable amount because the assets are no longer used.
The book value of factory assets in use has been lowered to the recoverable amount. All the book values ofidle assets have been recognized as impairment loss.

17

Notes to the Consolidated Financial Statements

Note 11:
Short-Term
Loans Payable
and Long-Term
Loans Payable

Information with respect to short-term loans payable at December 31, 2018 and 2017, is as follows:
The average interest rate for the fiscal years ended December 31, 2018 and 2017, is 1.92% and 2.19%, respectively, for short-term loans payable, and -0.01% and -0.01%, respectively, for commercial papers.
Bonds payable, long-term loans payable and lease obligations at December 31, 2018 and 2017, comprisethe following:
2018

Millions of yen
2017

0.53% Japanese yen notes due 2022

¥ 10,000¥ 10,000

1.00% Japanese yen notes due 2025

10,00010,000

0.95% Japanese yen notes due 2036

5,000

5,000

0.36% Japanese yen notes due 2026

5,000

5,000

0.42% Japanese yen notes due 2027

10,00010,000

0.15% Japanese yen notes due 2022

10,00010,000

0.15% Japanese yen notes due 2023

10,000—Loans due 2019–2028, with an average interest rate of 0.90%

169,583

149,694

4,896

4,602

Lease obligations
Subtotal
Less: current portion of long-term loans payable
Less: current portion of bonds
Less: lease obligations—current
Total

234,479

204,296(49,792)(27,677)

—

—

(667)

(557)

¥184,020¥176,062

The annual maturities of bonds payable, long-term loans payable and lease obligations for the fiscal years
subsequent to December 31, 2018, are as follows:
Millions of yen

2019¥ 50,459

2020

24,2142021

40,3542022

47,1882023

15,498Thereafter

56,766

Total¥234,479

The amounts of assets pledged as collateral and secured borrowings and loans at December 31, 2018, comprise the following:
Millions of yen

Assets pledged as collateral:
Cash and deposits¥

Notes and accounts receivable—trade

3,792

Inventories

2,208

Property, plant and equipment

4

Total

559
¥6,563

Secured borrowings and loans:
Short-term loans payable

¥

90

Total

¥

90

18

Notes to the Consolidated Financial Statements

Note 12:Retirement andPension Plans(1) Overview of adopted retirement and pension plans
The Company and a number of domestic consolidated subsidiaries have defined benefit pension plans such asa cash balance–style pension plan and retirement plans, and defined contribution pension plans. Some foreign
consolidated subsidiaries maintain defined benefit pension plans and defined contribution pension plans. The
Company contributes certain available-for-sale securities to the employee retirement benefit trust.
(2) Defined benefit pension plans (including multi-employer plan)
Changes in defined benefit obligations

As of January 1, 2018

Domestic plans

Millions of yen
Foreign plans¥93,561¥153,835

Service cost

2,211

693

Interest cost

739

3,918

Actuarial gains and losses(106)(9,072)(4,727)(6,148)

Past service cost

Benefits paid

—

(69)

Exchange translation differences—(8,386)

Other

—

295

¥91,678¥135,066

As of December 31, 2018

Note: Some of the domestic consolidated subsidiaries have adopted a simplified method for the calculation of retirement benefits.

As of January 1, 2017

Domestic plans

Millions of yen
Foreign plans¥95,274¥146,257

Service cost

2,225

717

Interest cost

752

4,661

Actuarial gains and losses

(70)

4,767

(4,620)(6,342)—

8

Exchange translation differences

—

3,697

Other

—

70

¥93,561¥153,835

Benefits paid
Past service cost

As of December 31, 2017

Note: Some of the domestic consolidated subsidiaries have adopted a simplified method for the calculation of retirement benefits.

Changes in plan assets

As of January 1, 2018
Expected return on plan assets
Actuarial gains and losses

Domestic plans

Millions of yen
Foreign plans¥ 125,464¥ 132,566

3,206

6,163

(11,247)(12,992)

Contributions by the employer

1,537

4,703

Benefits paid

(4,651)(5,964)—(7,515)

Exchange translation differences
Other
As of December 31, 2018—44

¥ 114,309¥ 117,005

19

Notes to the Consolidated Financial Statements

Domestic plans

Millions of yen
Foreign plans¥121,278¥120,255

Expected return on plan assets

3,051

6,295

Actuarial gains and losses

4,641

6,109

Contributions by the employer

1,012

2,794

Benefits paid

(4,518)(6,153)—3,214

As of January 1, 2017

Exchange translation differences
Other
As of December 31, 2017—52

¥125,464¥132,566

Reconciliation of defined benefit obligations and plan assets on retirement benefits recognized in
the consolidated balance sheet

Domestic plans

Millions of yen
2018
Foreign plans

Funded defined benefit obligations¥

90,473¥ 134,098

Plan assets(114,309)(117,005)

Subtotal(23,836)

17,093

Unfunded defined benefit obligations

1,205

968

Net amount of liabilities and assets recognized in consolidated balance sheet¥ (22,631)¥

18,061

Liabilities (net defined benefit liability)¥¥

18,889Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet

1,630(24,261)¥ (22,631)

Domestic plans

Funded defined benefit obligations

¥

(828)
¥

18,061Millions of yen
2017
Foreign plans

92,418¥ 152,831

Plan assets(125,464)(132,566)

Subtotal(33,046)

20,265

1,143

1,004

Unfunded defined benefit obligations
Net amount of liabilities and assets recognized in consolidated balance sheet¥ (31,903)¥

21,269Liabilities (net defined benefit liability)¥¥

21,408¥21,269Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet

1,366(33,269)¥ (31,903)(139)

Retirement benefit expenses and its breakdowns

Domestic plans

Service cost
Interest cost
Expected return on plan assets
Recognition of actuarial gains and losses
Amortization of past service costTotal

¥ 2,211

Millions of yen
2018
Foreign plans

¥

693

739

3,918

(3,206)(6,163)

(678)

1,303

—

(69)

¥ (934)¥ (318)

Note: Other than these retirement benefit expenses, severance costs in the consolidated statement of income include retiree premium benefit.

20

Notes to the Consolidated Financial Statements

Domestic plans

Service cost

¥ 2,225

Interest cost
Expected return on plan assets

¥

717

752

4,661

(3,051)(6,295)

(264)

1,472

—

8

Recognition of actuarial gains and losses
Amortization of past service cost
Total

Millions of yen
2017
Foreign plans¥ (338)¥563

Note: Other than these retirement benefit expenses, severance costs in the consolidated statement of income include retiree premium benefit.

Past service cost and actuarial gains and losses
The past service cost and actuarial gains and losses recognized in accumulated other comprehensive income asremeasurements of defined benefit plans (amount before income tax effect) for the fiscal years ended December 31, 2018 and 2017, are as follows:

Domestic plans

Millions of yen
2018
Foreign plans

Past service cost¥—

¥ (876)

Actuarial gains and losses(11,819)(278)¥(11,819)¥(1,154)

Domestic plans

Millions of yen
2017
Foreign plans

¥

¥

Total

Past service cost
Actuarial gains and losses
Total

—

4

4,448

1,901

¥4,448¥1,905

Unrecognized past service cost and unrecognized actuarial gains and losses
The unrecognized past service cost and unrecognized actuarial gains and losses recognized in accumulated
other comprehensive income as remeasurements of defined benefit plans (amount before income tax effect)
for the fiscal years ended December 31, 2018 and 2017, are as follows:

Domestic plans

Unrecognized past service cost
Unrecognized actuarial gains and losses
Total

Unrecognized past service cost
Unrecognized actuarial gains and losses
Total

¥

—

Millions of yen
2018
Foreign plans

¥

(747)

(1,795)(44,827)¥(1,795)¥(45,574)

Domestic plans

Millions of yen
2017
Foreign plans

¥

—

¥

129

10,024(44,549)¥10,024¥(44,420)

21

Notes to the Consolidated Financial Statements

Major breakdown of plan assets
Domestic plans

2018
Foreign plans

Equity securities

49.6%

24.8%

Debt securities

24.9%

56.3%

Other

25.5%

18.9%

100.0%

100.0%

Total

Note: 23.5% of the assets of the domestic plans are available-for-sale securities contributed to the employee retirement benefit trust.

Domestic plans

2017
Foreign plans

Equity securities

51.8%

29.0%

Debt securities

22.0%

58.0%

Other

26.2%

13.0%

100.0%

100.0%

Total

Note: 27.5% of the assets of the domestic plans are available-for-sale securities contributed to the employee retirement benefit trust.

Actuarial assumptions
Domestic plans

2018
Foreign plans

Discount rate

0.8%

1.3%–4.4%

Expected return rate on plan assets

3.0%

4.9%–6.0%

Expected rate of increase in salary3.1%

2.0%–3.5%

Note: Expected return rate on plan assets is determined by considering the current and anticipated future portfolio of plan assets and current
and anticipated future long-term performance of individual asset classes that comprise the funds’ asset mix.

Domestic plans

2017
Foreign plans

Discount rate

0.8%

1.2%–3.7%

Expected return rate on plan assets

3.0%

5.0%–6.2%

Expected rate of increase in salary3.3%

2.0%–3.5%

Note: Expected return rate on plan assets is determined by considering the current and anticipated future portfolio of plan assets and current
and anticipated future long-term performance of individual asset classes that comprise the funds’ asset mix.

(3) Defined contribution pension plans
The required contributions borne by the Company and a number of consolidated subsidiaries in relation to thedefined contribution pension plans for the fiscal years ended December 31, 2018 and 2017, are ¥1,940 millionand ¥2,042 million, respectively.

Note 13:Net Assets

Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant
provisions in the Companies Act that affect financial and accounting matters are summarized below:(1) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain criteria suchas: (a) having a board of directors, (b) having independent auditors, (c) having a board of corporate auditorsand (d) the term of service of the directors being prescribed as one year rather than the two years of a normal
term by its articles of incorporation, the board of directors may declare dividends (except for dividends in kind)at any time during the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all the above criteria.
The Companies Act permits companies to distribute dividends in kind (non-cash assets) to shareholders subject to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the board of directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury shares. The limitation is defined as the amount22

Notes to the Consolidated Financial Statements

available for distribution to the shareholders, but the amount of net assets after dividends must be maintained
at no less than ¥3 million.
(2) Increases/decreases and transfer of common stocks, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal
reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus)
depending on the equity account charged upon the payment of such dividends until the total of the aggregate
amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capitalsurplus and retained earnings can be transferred among the accounts under certain conditions upon resolutionof the shareholders.
(3) Treasury shares and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury shares and dispose of such treasury
shares by resolution of the board of directors. The amount of treasury shares purchased cannot exceed theamount available for distribution to the shareholders which is determined by a specific formula.
Under the Companies Act, stock acquisition rights, which were previously presented as a liability, are now
presented as a separate component of equity.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights andtreasury shares. Such treasury stock acquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.

Note 14:
Capital Stock

The total amount of capital stock authorized as of December 31, 2018 and December 31, 2017, is
150,000,000 shares.
The total amount of capital stock issued as of December 31, 2018 and December 31, 2017, is95,156,904 shares.

Note 15:
Treasury Shares

The number of treasury shares as of December 31, 2018 and 2017, are as follows:
Shares2018
Decrease in As of December 31,
FY20182018

As of January 1,
2018

Increase in
FY2018

Common stock

512,293

2,642

3,900

511,035

Total

512,293

2,642

3,900

511,035

Treasury shares:

Notes: 1. The shares held by the Board Benefit Trust (BBT) (147,800 shares) are included in the number of treasury shares.
2. The increase of treasury shares of common stock (2,642 shares) was due to the purchase of odd-lot shares.
3. The decrease of treasury shares of common stock (3,900 shares) was due to the benefit of the Company’s shares by the Board Benefit Trust (BBT).

Shares2017
Decrease in As of December 31,
FY20172017

As of January 1,
2017

Increase in
FY2017

Common stock

356,552

155,741—

512,293

Total

356,552

155,741—

512,293

Treasury shares:

Notes: 1. The shares held by the Board Benefit Trust (BBT) (151,700 shares) are included in the number of treasury shares.
2. The increase of treasury shares of common stock (155,741 shares) was due to the purchase of odd-lot shares (4,041 shares) and theacquisition of the Company’s shares by the Board Benefit Trust (BBT) (151,700 shares).

23

Notes to the Consolidated Financial Statements

Note 16:
Income Taxes

The differences between the normal effective statutory tax rate in Japan and the actual effective tax rate forthe fiscal years ended December 31, 2018 and 2017, are as follows:
Normal effective statutory tax rate in Japan

2018

2017

30.9%

30.9%

Adjustments:
Valuation allowance change(0.6)%(6.3)%Tax rate differences(4.6)%(5.0)%

Equity in earnings of affiliates(2.4)%(2.2)%

Entertainment and other non-deductible expenses

2.4%

1.5%

Elimination of intercompany dividends income

12.0%

14.8%

Dividends income and other non-taxable income(9.8)%(9.4)%

State, provincial, municipal and local taxes

0.8%

0.7%

Tax credit for research and development and others(1.7)%(2.7)%—%(0.3)%Tax credit for the Special Tax Law for the March 11 Earthquake(0.8)%(1.6)%

Other

4.6%

5.0%

30.8%

25.4%

Adoption of FIN48

Actual effective tax rate

The tax effects of significant temporary differences and loss carryforwards, which resulted in deferred tax assets and liabilities, as of December 31, 2018 and 2017, are as follows:
2018

Millions of yen
2017

Deferred tax assets:
Inventories

¥

3,407

¥

3,339

Property, plant and equipment

4,155

4,371

Intangible assets

4,470

5,815

Research and development costs

4,736

4,711

Allowance for doubtful accounts

1,788

1,857

Provision for bonuses

1,917

2,112

Net defined benefit liability

5,464

5,881

900

992

Net operating loss carryforwards

18,974

20,816

Other

9,176

10,429Unrealized gain

Subtotal

54,98760,323

Less: valuation allowance(12,084)(13,576)

42,903

46,747

Property, plant and equipment(3,120)(3,359)Net defined benefit asset(1,728)(3,231)

Contribution of securities to employee retirement benefit trust(1,277)(1,510)

Deferred income taxes related to gains from property, plant and equipment(2,791)(2,883)(665)(3,442)

Total
Deferred tax liabilities:

Valuation difference on available-for-sale securities
Other(2,816)(2,929)Total(12,397)(17,354)

Net deferred tax assets¥ 30,506¥ 29,393

24

Notes to the Consolidated Financial Statements

Note 17:
Research andDevelopment
Costs

Research and development costs charged to income for the fiscal years ended December 31, 2018 and 2017,are ¥12,923 million and ¥12,427 million, respectively.

Note 18:
LeasesOperating leases
Future minimum rental payments under non-cancellable operating leases at December 31, 2018 and 2017, areas follows:

Due within one year
Due after one year
Total

2018

Millions of yen
2017¥ 2,570¥ 2,652

7,676

8,270

¥10,246¥10,922

Note 19:
Financial
Instruments

Group policy for financial instruments
The Group manages funds with safe and secure financial assets. Means of financings include direct financing
such as the issuance of bonds and commercial papers and liquidation of receivables, as well as indirect financing such as short- and long-term bank borrowings, the terms of which are determined based on financial market conditions and account balances at the time.
Nature and extent of risks arising from financial instruments
Receivables such as trade notes and accounts receivable are exposed to customer credit risk. In addition, someof such receivables are denominated in foreign currencies and are exposed to the market risk of fluctuation inforeign currency exchange rates. Investment securities, mainly the stocks of customers and suppliers, are exposed to the risk of market price fluctuations.
Payment terms of payables, such as trade notes and accounts payable, are less than one year. In addition,some of such payables are denominated in foreign currencies and are exposed to the market risk of fluctuation
in foreign currency exchange rates.
Funds needed for operations are mainly procured as short-term loans payable, whereas funds needed forcapital expenditure and investment are mainly procured as long-term loans payable, bonds payable and leaseobligations with regard to finance lease transactions. A part of such bank loans, bonds and lease obligations
are exposed to market risks from changes in variable interest rates. Trade accounts payable and loans payableof the Company are also exposed to liquidity risk that the Company cannot meet its contractual obligations infull on maturity dates.
Risk management for financial instruments
The Company manages its credit risk from trade notes and accounts receivable on the basis of internal guidelines, which include the monitoring of payment terms and balances of customers by the sales and businessadministration departments to identify the default risk of customers at an early stage. The consolidated subsidiaries of the Company manage the exposure to credit risk on their own in accordance with their internal guidelines. Investment securities are managed by monitoring market values, the financial position of issuers andconsidering the relationship with customers and suppliers on a regular basis. The Group also tries to mitigate
liquidity risk by arranging lines of credit with financial institutions, along with adequate financial planning.

25

Notes to the Consolidated Financial Statements

Fair values of financial instruments
The following tables present the carrying amounts and the fair values of financial instruments at December
31, 2018 and 2017. Financial instruments whose fair values are not reliably measured are excluded from thetables below.
Millions of yen
2018
Difference

Carrying amount

Fair value

Cash and deposits¥ 19,782¥ 19,782

Notes and accounts receivable—trade209,763

209,763—

27,49725,120(2,377)

Assets:¥—Investment securities
Stocks of subsidiaries and affiliates
Other

10,485

10,485—

Total¥267,527¥265,150¥(2,377)¥118,554¥118,554¥

Short-term loans payable

29,98629,986—

Current portion of long-term loans payable

49,79249,81725

Liabilities:
Notes and accounts payable—trade

Lease obligations (current)
Income taxes payable

—

667

667

—

2,843

2,843

—

Bonds payable

60,00060,648648

Long-term loans payable

119,791

120,091

300

Lease obligations (non-current)
Total

4,229

4,565

336

¥385,862¥387,171¥ 1,309

¥

152

¥

152

¥

¥

171

¥

171

Derivative financial instruments: (Note)
Hedge accounting—not applied
Hedge accounting—applied
Total

19

19

—
—

¥

Note: Figures are net of debts and credits that arise from derivative financial instruments. Net debt amounts are indicated in parentheses.

—

26

Notes to the Consolidated Financial Statements

Carrying amount

Fair value

Millions of yen
2017
Difference

Cash and deposits¥ 17,883¥ 17,883¥

Notes and accounts receivable—trade226,968

226,968—

27,95535,436

7,481

Assets:—Investment securities
Stocks of subsidiaries and affiliates
Other

19,537

19,537—

Total¥292,343¥299,824¥7,481¥117,199¥117,199¥

Short-term loans payable

61,38561,385—Current portion of long-term loans payable

27,677

27,69013

Liabilities:
Notes and accounts payable—trade

Lease obligations (current)
Income taxes payable

—

557

557

—

4,793

4,793

—

Bonds payable

50,00050,395395

Long-term loans payable

122,017

122,141

124

Lease obligations (non-current)
Total

4,045

4,414

369

¥387,673¥388,574

¥ 901

¥

(394)

¥

(394)

¥

—

¥

(398)

¥

(398)

¥

—

Derivative financial instruments: (Note)
Hedge accounting—not applied
Hedge accounting—applied
Total

(4)

(4)

—

Note: Figures are net of debts and credits that arise from derivative financial instruments. Net debt amounts are indicated in parentheses.

The valuation techniques used to estimate the fair values of financial instruments and information on themarketable securities and derivative financial instruments are as follows:
AssetsCash and deposits and notes and accounts receivable–trade
The fair values of cash and deposits and notes and accounts receivable–trade approximate their carrying
amounts as these amounts are settled in a short period of time.
Investment securities
The fair values of investment securities are measured at the quoted market price on the stock exchange.
Liabilities
Notes and accounts payable–trade, short-term loans payable and income taxes payable
The fair values of these accounts approximate their carrying amounts as these amounts are settled in a shortperiod of time.
Current portion of long-term loans payable and long-term loans payable
For long-term loans payable bearing a floating interest rate, the fair values of those subject to special treatment
of interest rate swaps are based on present value by totaling the amount of principal and interest, together
with related interest rate swaps, discounted by the interest rate that would apply if equivalent long-term loans
were newly entered into. The fair values of other long-term loans payable for which a floating interest rate isapplied approximate their carrying amounts, due to the fact that the market rate of interest is quickly factored
in while credit status of the Company remains unchanged.
On the other hand, the fair values of long-term loans payable for which a fixed interest rate is applied aredetermined by discounting the cash flows related to the long-term loans payable. The discount rate applied forthe calculation above is the interest rate that may be currently available to the Group for loans payable withsimilar terms and conditions.

27

Notes to the Consolidated Financial Statements

Lease obligations (current) and lease obligations (non-current)
The fair values of these accounts are determined by discounting the cash flows related to the lease obligations.
The discount rate applied for the calculation above is the interest rate that may be currently available to theGroup for lease obligations with similar terms and conditions.
Bonds payable
The fair values are measured at the quoted market prices.
Derivative financial instruments
Please see Note 20 “Derivative Financial Instruments” for more information.
Financial instruments whose fair values are not reliably measured
There are no market prices for non-listed stocks and others (carrying amounts as of December 31, 2018 and2017, are ¥29,541 million and ¥29,375 million, respectively) whose future cash flows cannot be estimated.
The fair values of such non-listed stocks and others are not reliably determinable and thus excluded frominvestment securities.
Redemption schedule for financial assets and securities
The redemption schedules for financial assets and securities with contractual maturities as of December 31,
2018 and 2017, are summarized as follows:

Notes and accounts receivable—trade
Total

Due in 1 year
or less

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2018
Due after
10 years¥209,763

¥—

¥—

¥—

¥209,763

¥—

¥—

¥—

Due after 5 years
through 10 years

Millions of yen
2017
Due after
10 years

Due in 1 year
or less

Notes and accounts receivable—trade
Total

Due after 1 year
through 5 years¥226,968

¥—

¥—

¥—

¥226,968

¥—

¥—

¥—

Repayment schedule for bonds payable, long-term loans payable and other interest-bearing debt
The repayment schedules for bonds payable, long-term loans payable and other interest-bearing debt with
contractual maturities as of December 31, 2018 and 2017, are summarized as follows:

Due in 1 year
or less

Short-term loans payable¥29,986

Current portion of long-term loans payable

49,792

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2018
Due after
10 years

¥

¥

¥

—
—

—
—

—
—

Lease obligations (current)

667

—

—

—

Bonds payable—

30,00025,0005,000

Long-term loans payable—

94,82324,968—

Lease obligations (non-current)
Total

—

2,431

1,798

—

¥80,445¥127,254¥51,766¥5,00028

Notes to the Consolidated Financial Statements

Due in 1 year
or less

Short-term loans payable¥61,385

Current portion of long-term loans payable

27,677

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2017
Due after
10 years

¥

¥

¥

—
—

—
—

—
—

Lease obligations (current)

557

—

—

—

Bonds payable—

20,00025,0005,000

Long-term loans payable—

112,017

10,000—

Lease obligations (non-current)

—

1,925

2,120

—

¥89,619¥133,942¥37,120¥5,000Total

Note 20:
Derivative
Financial
Instruments

The Group has entered into various foreign currency forward contracts, currency options and swaps, interest
rate swaps and commodity swaps.
Foreign currency forward contracts and currency options and swaps are entered into to hedge the effects of
exchange rate changes on receivables and payables or anticipated transactions denominated in foreign currencies. Interest rate swaps are entered into to hedge the effects of interest rate changes and to reduce financing
cost. Commodity swaps are entered into to hedge the effects of commodity price changes of fuel. Loansdenominated in foreign currencies are entered into to hedge a part of risks associated with the fluctuations of
exchange rates for investments in foreign entities.
The Group does not use derivative instruments for trading or speculative purposes. Derivative transactions
performed by the Group have risks due to fluctuations of exchange rates, interest rates and other factors.
Because these transactions are executed with creditworthy financial institutions, the Group does not anticipate the likelihood of any losses resulting from default by the counterparties to these agreements.
Internal regulation for managing derivative transactions has been established for the purpose of risk control
in the Company, and all derivative transactions are performed under this regulation.
The execution of derivative transactions is carried out by the Company’s finance department, and the management of risk is monitored by the Company’s accounting department. Transactions are periodically reported
to the board of directors by the officer in charge of the Finance and Accounting Division.
Consolidated subsidiaries execute transactions in accordance with their regulations for derivative management and periodically report the results of those transactions to the Company.

29

Notes to the Consolidated Financial Statements

Derivative transactions to which hedge accounting is not applied at December 31, 2018 and 2017
(1) Currency related
Millions of yen
2018
Contract/notionalamountContract/notionalamount due after
one year

Fair value

Unrealized
gain/loss¥ 1,205

¥—

¥(14)

¥(14)

U.S.$

1,252

—

37

37

Other

865

—

4

4

Russian ruble

2,736

—

106

106

Colombian peso

1,549

—

18

18

Canadian $

1,273

—

20

20

380

—

(8)

(8)

3,878

—

(14)

(14)

Currency options: (Note 1)
SellingEuro
BuyingForeign currency forward contracts: (Note 2)
Selling

Other
Buying
U.S.$
Other
Total

394

—

3

3

¥13,532

¥—

¥152

¥152

Notes: 1. The fair values of currency options are measured using the quoted price obtained from financial institutions. Currency options used
are called collar options, which effectively limit the risk arising from the changes in exchange rate by the combination of buying call
options and selling put options, or selling call options and buying put options.
2. The fair values of foreign currency forward contracts are measured using the forward quotation.

Millions of yen
2017
Contract/notionalamountContract/notionalamount due after
one year

Fair value

Unrealized
gain/loss

Currency swaps: (Note 1)(Payment in H.K.$ and receipt in U.S.$)

826

¥—

437

—

4

4

603

—

(5)

(5)

U.S.$

6,578

—

(118)

(118)

Euro

1,124

—

2

2

Russian ruble

5,812

—

(39)

(39)

Colombian peso

1,724

—

11

11

Canadian $

1,586

—

(108)

(108)

Other

1,486

—

(24)

(24)

2,836

—

(101)

(101)

Other

¥

¥

12

¥

12

Currency options: (Note 1)
SellingEuro
BuyingForeign currency forward contracts: (Note 2)
Selling

Buying
U.S.$
Other
Total

291

—

(28)

(28)

¥23,303¥—¥(394)¥(394)

Notes: 1. The fair values of currency swaps and currency options are measured using the quoted price obtained from financial institutions.
Currency options used are called collar options, which effectively limit the risk arising from the changes in exchange rate by the
combination of buying call options and selling put options, or selling call options and buying put options.
2. The fair values of foreign currency forward contracts are measured using the forward quotation.

30

Notes to the Consolidated Financial Statements

Derivative transactions to which hedge accounting is applied at December 31, 2018 and 2017
(1) Currency related
Millions of yen
2018
Hedged item

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥ 391

¥—

¥ 9

338

—

7

78

—

(1)

2,552

—

540

—

¥3,899¥—Foreign currency forward contracts: (Note 1)
Selling
U.S.$
Other

Forecasttransaction

BuyingU.S.$

Accounts
payable—trade

Foreign currency forward contracts:(Notes 1 and 2)
Selling
U.S.$
Other

Accounts
receivable—trade

Total

¥15

Notes: 1. The fair values of foreign currency forward contracts are measured using the quoted price obtained from financial institutions.
2. Exchange contracts appropriated to specific debts and credits are settled together with either accounts receivable–trade, loans payable or accounts payable–trade subject to hedged transaction. Accordingly, the fair values of such exchange contracts are reflectedin accounts receivable–trade, loans payable or accounts payable–trade.

Millions of yen
2017
Hedged item

Contract/notionalamountContract/notionalamount due after
one year

Fair value¥ 1,582

¥—

¥ 9

263

—

(2)

Foreign currency forward contracts: (Note 1)
Selling
U.S.$
Other

Forecasttransaction

BuyingU.S.$
Other

Accounts
payable—trade

113

—

(1)

14

—

0

Accounts
receivable—trade

3,094

—

356

—

Loans payable
and Accounts
payable—trade

1,379

—

1,351

—

Loans payable

36,643—¥44,795¥—

Foreign currency forward contracts:(Notes 1 and 2)
Selling
U.S.$
Other
BuyingU.S.$
Chinese yuan
Currency swaps: (Notes 1 and 2)(Payment in Japanese yen and receipt in
U.S.$)
Total¥ 6

Notes: 1. The fair values of currency swaps and foreign currency forward contracts are measured using the quoted price obtained from financial institutions.
2. Exchange contracts and currency swaps appropriated to specific debts and credits are settled together with either accounts receivable–trade, loans payable or accounts payable–trade subject to hedged transaction. Accordingly, the fair values of such exchange contracts are reflected in accounts receivable–trade, loans payable or accounts payable–trade.

31

Notes to the Consolidated Financial Statements(2) Interest related
Millions of yen
2018
Hedged item

Interest rate swaps: (Note)(Fixed rate payment, floating rate receipt)
Total

Loans payable

Contract/notionalamountContract/notionalamount due after
one year

Fair value¥62,596¥62,596¥46,559¥46,559¥—

Note: If interest rate swaps qualify for hedge accounting and meet certain specific criteria, they are settled together with loans payable subject
to hedged transaction. Accordingly, the fair values of such interest rate swaps are reflected in loans payable.

Millions of yen
2017
Hedged item

Interest rate swaps: (Note)(Fixed rate payment, floating rate receipt)
Total

Loans payable

Contract/notionalamountContract/notionalamount due after
one year

Fair value¥47,540¥47,540¥36,270¥36,270¥—

Note: If interest rate swaps qualify for hedge accounting and meet certain specific criteria, they are settled together with loans payable subject
to hedged transaction. Accordingly, the fair values of such interest rate swaps are reflected in loans payable.

(3) Commodity related
Millions of yen
2018
Hedged item

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥153

¥42

¥4

¥153

¥42

¥4

Note: The fair values of commodity swaps are measured using the quoted price obtained from the exchange.

Millions of yen
2017
Hedged item

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥170

¥47

¥(10)

¥170

¥47

¥(10)

2018

Millions of yen
2017

Note: The fair values of commodity swaps are measured using the quoted price obtained from the exchange.

Note 21:
Commitments
and Contingent
Liabilities

Contingent liabilities at December 31, 2018 and 2017, are as follows:

Trade notes discounted with banks
Liabilities for guarantee and other
Total

¥

9

¥ 21

637

705

¥646

¥726

In the opinion of management, the eventual settlement of pending lawsuits in which any of the companies
in the Group is the defendant will not have a material effect on the consolidated financial position or consolidated results of operations of the Group.

32

Notes to the Consolidated Financial Statements

Note 22:
Other
Comprehensive
IncomeEach component of other comprehensive income and related tax effects (including those on non-controllinginterests) for the fiscal years ended December 31, 2018 and 2017, comprises the following:
2018

Millions of yen
2017

Valuation difference on available-for-sale securities:
Gains (losses) arising during the year

¥ (6,160)¥ 3,940

Reclassification adjustments to profit (loss)(3,118)(214)

Amount before income tax effect(9,278)

3,726

Income tax effect2,776(1,136)Total(6,502)

2,590

Gains (losses) arising during the year

637

Reclassification adjustments to profit (loss)

17

227

Amount before income tax effect

23

264

Income tax effect

(6)

(81)

Total

17

183

(20,112)

1,015

Deferred gains or losses on hedges:

Foreign currency translation adjustment:
Adjustments arising during the year
Reclassification adjustments to profit (loss)

(91)

(36)

Amount before income tax effect(20,203)

979

Total

(20,203)979(13,529)

5,137

Remeasurements of defined benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit (loss)

556

1,216

(12,973)

6,353

Income tax effect

3,560(1,635)

Total(9,413)

4,718(1,547)

1,565

Amount before income tax effect

Share of other comprehensive income of associates accounted for using
equity method:
Gains (losses) arising during the year
Reclassification adjustments to profit (loss)
Total
Total other comprehensive income2(2)(1,545)

1,563¥(37,646)¥10,033

Note 23:
Subsequent
EventsAt the Company’s annual general meeting of shareholders held on March 27, 2019, the shareholders approved
the following appropriations of retained earnings:
Millions of yen

Cash dividends, ¥65.00 per share
Total¥6,162¥6,162

Note: The total amount of dividends resolved at the annual general meeting of shareholders held on March 27, 2019, includes dividends of¥10 million for the Company’s shares held by the Board Benefit Trust (BBT).

33

Notes to the Consolidated Financial Statements

Note 24:
Segment
Information(1) Segment information
Description of reportable segments
The reportable segments of the Group are components for which discrete financial information is available andwhose operating results are regularly reviewed by the board of directors to evaluate their performance and determine the allocation of management resources.
The Group has seven product divisions, namely “Printing Inks,” “Pigments,” “Liquid Crystal Materials,”“Polymers,” “Liquid Compounds,” “Solid Compounds” and “Application Materials,” and each product division conducts its business.
The product divisions are aggregated into five reportable segments, namely “Printing Inks,” “Fine Chemicals,”“Polymers,” “Compounds” and “Application Materials,” based on the similarity of the products and services.
“Printing Inks” mainly consists of gravure inks, offset inks and news inks. “Fine Chemicals” mainly consistsof organic pigments and liquid crystal materials. “Polymers” mainly consists of synthetic resins, such as acrylic,polyurethane, epoxy and polystyrene resins. “Compounds” mainly consists of polyphenylene sulfide (PPS) compounds, jet inks and plastic colorants. “Application Materials” mainly consists of industrial adhesive tapes andhealth foods.
Methods of measurement for the amounts of sales, profit (loss), assets, liabilities and other items
for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2 “Summary of
Significant Accounting Policies.”
Segment profits are based on operating income.
Intersegment sales are mainly based on market price or cost of goods manufactured.
Information about sales, profit (loss), assets, liabilities and other items
Millions of yen
2018
Printing
Inks

Fine
Chemicals

Reportable Segments
Application
Materials
Total
Polymers Compounds

Others

Total

Sales:
Sales to customers
Intersegment sales¥380,558 ¥ 99,659 ¥201,231¥65,111¥58,427 ¥804,986¥

512 ¥805,498—

32,608

4,587

111

52

37,358—37,358

Total sales

380,558

132,267

205,818

65,22258,479842,344512

842,856

Segment profit

13,783

16,40917,532

3,221

3,196

54,141

95

54,236¥319,462 ¥ 98,276 ¥208,859¥89,036

Segment assets¥53,748 ¥769,381¥36,108 ¥805,489

Others:Depreciation and amortization

11,611

4,846

8,131

4,606

2,148

31,342378

31,720

Amortization of goodwill

22

1

103

—

—

126

30

156

Investments in affiliates

2,630

1,149

21,61623,945

1,632

50,972

3,579

54,551

Increase in property,
plant and equipment andintangible assets

9,212

6,461

8,637

4,284

3,069

31,663250

31,913

34

Notes to the Consolidated Financial Statements

Millions of yen
2017
Printing
Inks

Fine
Chemicals

Reportable Segments
Application
Materials
Total
Polymers Compounds

Others

Total

Sales:
Sales to customers¥373,666 ¥100,878 ¥193,649

Intersegment sales¥64,605¥56,019 ¥788,817¥

610 ¥789,427—

34,542

4,234

75

58

38,909—38,909Total sales

373,666

135,420

197,883

64,68056,077

827,726610

828,336

Segment profit

17,447

17,355

19,608

4,989

2,598

61,99758

62,055¥324,999 ¥ 98,203 ¥214,438¥94,350

Segment assets¥53,239 ¥785,229¥39,905 ¥825,134

Others:Depreciation and amortization

10,741

4,906

7,931

4,500

2,006

30,084408

30,492

Amortization of goodwill

54

124

137

—

—

315

30

345

Investments in affiliates

2,754

1,001

20,97324,788

1,583

51,0993,167

54,266

Increase in property,
plant and equipment andintangible assets

8,549

5,193

9,111

5,385

3,034

31,272382

31,654

Reconciliation between reportable segment total and amounts disclosed in consolidated financial
statements
2018

Millions of yen
2017¥842,344¥827,726

512

610

Sales:
Reportable segment total
Sales in “Others”
Elimination of intersegment transactions(37,358)(38,909)

Sales in consolidated financial statements¥805,498¥789,427

2018

Millions of yen
2017¥54,141¥61,997

Profit:Reportable segment total
Profit in “Others”

95

58

Corporate expenses(5,851)(5,572)

Operating income in consolidated financial statements¥48,385¥56,483

Note: Corporate expenses consist substantially of R&D expenses incurred by the DIC Central Research Laboratories to develop new products,
which are not included in any reportable segment.

2018

Millions of yen
2017

Assets:Reportable segment total¥769,381¥785,229

Assets in “Others”

36,10839,905

Elimination between segments(40,630)(39,793)

Corporate assets

40,627

46,415¥805,486¥831,756

Assets in consolidated financial statements

Note: Corporate assets consist of deferred tax assets and assets of the DIC Central Research Laboratories and Kawamura Memorial DIC Museumof Art, which are not included in any reportable segment.

35

Notes to the Consolidated Financial Statements

Other items are as follows:
Millions of yen
2017

2018

Depreciation and amortization

Reportable
Segments

Others Adjustments Consolidated

Reportable
Segments

Others Adjustments Consolidated¥31,342¥ 378¥1,105¥30,084¥ 408¥1,032¥32,825¥31,524

Amortization of goodwill

126

30

—

156

315

30

—

345

Investments in affiliates

50,972

3,579—

54,551

51,0993,167—

54,266

Increase in property,
plant and equipment andintangible assets

31,663250

171

32,084

31,272382

1,930

33,584

Notes: 1. The adjustments for depreciation and amortization are mainly depreciation and amortization related to the DIC Central ResearchLaboratories that cannot be allocated to any reportable segment.
2. The adjustments for increase in property, plant and equipment and intangible assets are mainly capital investments of the DIC
Central Research Laboratories that cannot be allocated to any reportable segment.

(2) Related information
Information about geographical areas

Japan

USA

OthersMillions of yen
2018
Total

Net sales (Note)¥292,857¥97,682¥414,959¥805,498

Property, plant and equipment

127,257

28,89871,996228,151

Note: Net sales is based on customer location and is classified by country.

Japan

USA

OthersMillions of yen
2017
Total

Net sales (Note)¥288,608¥101,129¥399,690¥789,427

Property, plant and equipment

125,369

26,81779,491

231,677

Note: Net sales is based on customer location and is classified by country.

Information about major customers
Not applicable for the fiscal years ended December 31, 2018 and 2017, because there is no single customer
which accounts for more than 10% of net sales shown in the consolidated statement of income.
(3) Impairment loss of assets by reportable segment
There was no impairment loss of assets for the fiscal year ended December 31, 2018.

Impairment loss

Printing Inks

Fine
Chemicals

Polymers

Compounds

Application
Materials

¥200

¥—

¥34

¥—

¥—

Millions of yen
2017
Corporate andOthers eliminations Consolidated

¥—

¥—

¥234

(4) Amortization and unamortized balances of goodwill by reportable segment
Millions of yen
2018
Corporate andOthers eliminations ConsolidatedPrinting Inks

Fine
Chemicals

Polymers

Compounds

Application
Materials

Amortization

¥22

¥ 1

¥103

¥—

¥—

¥30

¥—

¥156

Unamortized balances

34

—

—

—

—

—

—

34

Millions of yen
2017
Corporate andOthers eliminations ConsolidatedPrinting Inks

Fine
Chemicals

Polymers

Compounds

Application
Materials

Amortization

¥54

¥124

¥137

¥—

¥—

¥30

¥—

¥345

Unamortized balances

65

1

103

—

—

30

—

199

36

Notes to the Consolidated Financial Statements

Note 25:
Related-Party
Transactions(1) Related-party transactions with the Company
Related-party transactions with directors, corporate auditors, major individual shareholders and others of theCompany for the fiscal years ended December 31, 2018 and 2017, are as follows:
Millions of yen
2018Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Payment of rent
for buildings andothers (Note 4)

2,206

Security
deposit

1,883

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)

525

Trade
notes,
accounts
payable,and otheraccounts
payable217

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

61

Trade
notes andaccounts
receivable

31

Purchase of raw
materials andothers (Note 7)

6,038

Trade
notes,
accounts
payable,and otheraccounts
payable1,665

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

4,435

Trade
accounts
receivableand otheraccounts
receivable

1,408

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products—

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
Nissei Real-Estate Co., Ltd., Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. transferred all the Company’s shares to SHOEI INC.
and do not own voting rights of the Company as of the balance sheet date.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

37

Notes to the Consolidated Financial Statements

Millions of yen
2017Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties Owned
and others
Direct5.61%
Indirect
7.81%

Rental ofbuildings
and others

Payment of rent
for buildings andothers (Note 4)

2,196

Security
deposit

1,758

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)

530

Trade
notes,
accounts
payable,and otheraccounts
payable234

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

55

Trade
notes andaccounts
receivable

24

Purchase of raw
materials andothers (Note 7)

5,388

Trade
notes,
accounts
payable,and otheraccounts
payable1,503

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

4,079

Trade
accounts
receivableand otheraccounts
receivable

1,618

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products

Owned
Direct4.50%

Owned
Direct
3.31%

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

38

Notes to the Consolidated Financial Statements(2) Related-party transactions with consolidated subsidiaries
Related-party transactions with directors, corporate auditors, major individual shareholders and others of theCompany for the fiscal years ended December 31, 2018 and 2017, are as follows:
Millions of yen
2018Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties
and others—

Rental ofbuildings
and others

Payment of rent
for buildings andothers (Note 4)

15 Security
deposit8

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers—

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)

754 Tradenotes,
accounts
payable,and otheraccounts
payable339

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

57 Tradenotes andaccounts
receivable

24

Purchase of raw
materials andothers (Note 7)

1,485 Tradenotes,
accounts
payable,and otheraccounts
payable267

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

539 Trade
accounts
receivableand otheraccounts
receivable

191

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products—

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
Nissei Real-Estate Co., Ltd., Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. transferred all the Company’s shares to SHOEI INC.
and do not own voting rights of the Company as of the balance sheet date.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

39

Notes to the Consolidated Financial Statements

Millions of yen
2017Type ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties Owned Rental ofand others
Indirect buildings
13.42% and others

Payment of rent
for buildings andothers (Note 4)

16 Security
deposit8

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers

Purchaseof metallic
containers andothers (Note 5)

620 Tradenotes,
accounts
payable,and otheraccounts
payable264

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

57 Tradenotes andaccounts
receivable

25

Purchase of raw
materials andothers (Note 7)

978 Tradenotes,
accounts
payable,and otheraccounts
payable186

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

478 Trade
accounts
receivableand otheraccounts
receivable

147

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products

Owned
Indirect
4.50%

Owned
Indirect
3.31%

Purchaseof metallic
containers
and others

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights of Nissei
Real-Estate Co., Ltd.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rental of buildings and others” are determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” are determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” are determined based on an arms-length transaction.
7. “Purchase of raw materials and others” are determined based on an arms-length transaction.

40

Management’s Report on Internal Control

1. Basic framework for internal control over financial reporting
Kaoru Ino, Representative Director, President and CEO, and Masayuki Saito, Representative Director, Executive Vice President and CFO of DIC Corporation (the “Company”), are responsible for designing and operatinginternal control over the Company’s financial reporting and have designed and operated internal control overfinancial reporting in accordance with the basic framework for internal control set forth in “On the Revision of
the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over
Financial Reporting (Council Opinions),” issued by the Business Accounting Council of the Financial Services
Agency of Japan.
Internal control aims to achieve its objectives to a reasonable extent with the organized and integrated function of basic individual elements of internal control as a whole. Accordingly, due to the inherent limitations,
there is a possibility that misstatements may not be completely prevented or detected by internal controls overfinancial reporting.

2. Scope of assessment, the basis date of assessment and assessment procedures
The assessment of internal control over financial reporting for fiscal year 2018 was conducted as of December
31, 2018, which is the end of this fiscal year. The assessment was performed in accordance with relevant assessment standards generally accepted in Japan for internal control over financial reporting.
In conducting this assessment, we began by evaluating internal control which may have a material impact
on overall consolidated financial reporting (“company-level controls”) and, based on the results of this assessment, business processes to be assessed were selected. We then analyzed these selected business processes to
identify key controls therein that may have a material impact on the reliability of the Company’s financial reporting, after which we examined the design and operation of these controls. These procedures thus allowed
us to accurately evaluate the effectiveness of the Company’s internal control.
We determined the required scope of assessment of internal control over financial reporting for the Company and its consolidated subsidiaries and equity-method affiliates from the perspective of materiality or the
degree to which it may affect the reliability of financial reporting. Materiality of the impact which may affectthe reliability of financial reporting is determined based on potential quantitative and qualitative impact onfinancial reporting. In light of the results of assessment of company-level controls, we reasonably determined
the scope of assessment of process-level controls. Consolidated subsidiaries and equity-method affiliates whichwere concluded as immaterial taking into account the degree of quantitative and qualitative impact are notincluded in the scope for assessment of company-level controls.
With regard to the process-level controls, significant locations and business units to be tested were selectedbased on the changes in the scope of consolidation during the year, as well as on net sales for the previous
year, with locations and business units the combined sales volume of which reached approximately twothirds of consolidated net sales being defined as “significant.” The scope of assessment at these locations
and business units encompassed business processes relevant to net sales, accounts receivable-trade, accounts
payable-trade, inventories and manufacturing facilities included in property, plant and equipment as significant
accounts that may have a material impact on the business objectives of the Company. In addition, businessprocesses relating to (i) greater likelihood of material misstatements, and/or (ii) significant accounts involving
estimates and management’s judgment, were also identified as business processes having greater materiality,
taking into account their impact on financial reporting, and were included in the scope.

3. Results of the assessment
Based on the results of the assessment, we concluded that as of the end of the fiscal year ended December
31, 2018, the Company’s internal control over financial reporting was effectively maintained.

Kaoru Ino
Representative Director, President and CEO
DIC Corporation

41

Independent Auditor’s Report42

Independent Auditor’s Report43

Investor Information and Corporate Data
(As of December 31, 2018)

Investor Information
Common Stock

Corporate Data
DIC common stock is listed and traded on the Tokyo
Stock Exchange. There were 37,322 shareholdersof record on December 31, 2018. On the Tokyo Stock
Exchange, the high and low prices for each quarter ofthe years 2018 and 2017 were as follows:

Jan.–Mar.
Apr.–Jun.
Jul.–Sept.
Oct.–Dec.

2018
High
Low

2017
High
Low

¥4,525 ¥3,360
4,020 3,380
4,135 3,340
4,125 3,150¥4,365 ¥3,300
4,195 3,650
4,415 3,710
4,375 3,820

Independent Public Accountants

100 shares¥96,556,692,787 (95,156,904 shares)
Deloitte Touche Tohmatsu LLC

Distribution of Shareholders

Japanese financial institutions

Paid-in Capital

41.6%

23.9%

Financial instruments business operators: 4.6%

Corporate Headquarters
DIC Building, 7-20,
Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel.: (03) 6733-3000
http://www.dic-global.com/
Principal Domestic Offices, Plants
and Laboratories (Nonconsolidated)

Number of Employees

Other
ForeignJapanese
corporations
corporations
16.7%

35-58, Sakashita 3-chome, Itabashi-ku,
Tokyo 174-8520, Japan

Number of Branch Offices: 2
Number of Plants:
9
Number of Laboratories:
1

Total Number of Shares Authorized 150,000,000 shares
Number of Unit Shares

Registered Address

Japanese
individual
investors
and others
12.8%

Treasury stock: 0.4%

20,620Date of Foundation
February 15, 1908
Date of Incorporation
March 15, 1937

Number of
Shares Owned Percentage(Thousands)of Total

Major Shareholders

Transfer Agent

Meeting of Shareholders
For Further Information, Contact:

SHOEI INC.
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Japan Trustee Services Bank, Ltd.
(Trust Account)
The Dai-ichi Life Insurance Company,
LimitedJapan Trustee Services Bank, Ltd.
(Trust Account 4)
JP MORGAN CHASE BANK 385632
SMBC Nikko Securities Inc.
Aioi Nissay Dowa Insurance Co., Ltd.
NIPPON LIFE INSURANCE COMPANY
Japan Trustee Services Bank, Ltd.
(Trust Account 5)

12,694 13.39%
6,041

6.37

5,950

6.28

3,500

3.69

3,226
3,191
2,368
2,020
1,900

3.40
3.37
2.50
2.13
2.00

1,737 1.83
42,627 44.96%

Mitsubishi UFJ Trust and Banking Corporation
10-11, Higashisuna 7-chome, Koto-ku, Tokyo
137-8081, Japan
Our annual meeting of shareholders is held in March.
Corporate Communications Dept.
DIC Corporation
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel.: (03) 6733-3033
E-mail: prir@ma.dic.co.jp