How We Create ValueAt a Glance

Industrial Machinery
Products Business
Segment

Material andEngineering Business
Segment

Business
Segments

80.1%

18.7%

Industrial Machinery Products
Business Segment

Material and Engineering
Business Segment

New
Businesses

Our Industrial Machinery Products Business Segment comprises three sub-segments:(1) Plastic Production and Processing Machinery, (2) Molding Machines, and (3) Other
Machinery, and operates from three bases: the Hiroshima Plant, the Yokohama Plant, andthe Meiki Plant.
With a lineup of plastic production and processing machinery and plastic injection
molding machines for a variety of applications, we offer many products that command ahigh market share, such as our separator film manufacturing equipment for lithium-ion
batteries. In this segment, which accounts for nearly 80% of JSW Group’s net sales, we areworking to further expand the scale of our business, especially in the mainstay plastic
processing machinery market.

Our Material and Engineering Business Segment comprises two
sub-segments: (1) Steel Castings and Forgings and (2) Engineering
Services, and is operated by Japan Steel Works M&E, Inc. (Muroran
Plant), which was established as an operating subsidiary in April 2020.
In steel castings and forgings, we are either the world’s only
manufacturer or have a high market share for products such as large
shaft materials for power plants, pressure vessel components fornuclear power plants, and large components for pile-driving machines
used in the construction of offshore wind farms. With the shift torenewable energy, we are working to strengthen our earnings basethrough business structure reform.

We have narrowed down our
new businesses to the threefields of photonics,
composite materials, andmetallic materials.
We are working to achieve
profitability in each field
through the supply of
products: in photonics,
materials for semiconductors
and optical devices such assynthetic quartz and gallium
nitride (GaN); in composite
materials, lightweight andhigh-strength materials foraircraft and automobiles
such as carbon fiber
reinforced plastic (CFRP)
products; and in metallic
materials, materials forvarious electronic devices
such as titanium copper.

New Businesses

1.2%

Hiroshima Plant

Yokohama Plant

Japan Steel Works M&E, Inc.
(Muroran Plant)

Meiki Plant

Production
Bases

Net Sales¥213.7billion

Plastic Production and Processing Machinery

Molding Machines

Steel Castings and Forgings• Pelletizers• Film and sheet manufacturing equipment• Twin-screw extruders• After-sales services• Plastic injection molding
machines• Magnesium injection
molding machines• Blow molding machines• After-sales services• Parts for reactors(shells, heads, etc.)• Parts for steam generators• Clad steel plates

FY2021

New Businesses• Rotor shafts• Turbine casings• Die steel• Steel rolls for steel manufacturing

Photonics
Composite materials• Metallic materials••

Semiconductors andElectronic Devices

Shell flanges for pressure vessels

Integrated rotor shaft for power generation

Clad steel plates

Steel rolls for steel manufacturing

Plastic injection molding machines
Pelletizers

Other
Machinery

Plastic Production
and Processing
Machinery20%

Products

29%

Twin-screw extruders

Molding
Machines

31%

Vacuum laminators

Defense equipment• Excimer laser annealing systems• Defense equipment• Railway products• Hot press devices

Plastics

Mobility• Design and analysis• Welded structures• Inspection and survey• Hydrogen-related products, etc.

Mobility
Components
Design and analysis• Vacuum laminators• Deposition systems• After-sales services

Electronic Parts
Excimer laser annealing systems

Markets

High-Performance
Batteries

Aircraft Components

Engineering and Other Services
Magnesium injection molding
machines

Other Machinery

2 JSW Integrated Report 2022

Cameras andSensing Devices

Electronic
Devices

Defense

Welded structures

Power Generation
Equipment

Hydrogen pressure accumulator

Renewable Energy

Infrastructure

New Businesses

JSW Integrated Report 2022 3

Our History of Creating Value

1907

Founding (pre-war)

Post-war recovery

1970s

2000s

Rapid economic growth

Preparation for a new era

2022

•D
 ecarbonization-related demand• Development ofdefense industry• Transition tocommercial business• Increasing energy demand• Accelerating adoption ofelectronics in industry

Launch as anational project

Growth based on a
portfolio of technologies

Becoming a comprehensive company
in materials and mechatronics

Toward establishing a new
future vision for JSW

In 1907, The Japan Steel Works was established in
Muroran, Hokkaido, as a joint venture between threecompanies: Hokkaido Colliery Steamship Company andtwo U.K. firms: Sir W.G. Armstrong, Whitworth & Co.,
Ltd., and Vickers, Sons & Maxim, Ltd. By manufacturingarmaments as a national project, the company
contributed to the development of the defense industry.
Purchasing Hiroshima Seisakusho Co., Ltd., in 1920,
JSW established a Hiroshima factory (now known as theHiroshima Plant) to expand the armaments business.

After the Second World War, the focus of our businessunderwent a major shift to commercial products. Utilizing thetechnology cultivated through the manufacture of armaments,
we began in earnest to produce large steel castings andforgings, such as rotor shafts for power generation and pressure
vessels for oil refineries, and plastic processing machinery,such as injection molding machines and plastic extruders.

We focused on creating new added value in response tomarket changes such as increasing energy demand and theaccelerating adoption of electronics. Among the actions taken
were the manufacture of ultra-large components (pressure
vessels and rotor shafts) for nuclear power plants, a switchfrom hydraulic to electric injection molding machines, and theintroduction of magnesium molding technology.

To contribute to a society that is demanding products thatare friendly to the global environment, we manufactureand supply separator film manufacturing equipment forlithium-ion batteries, molding machines for large plastic
parts for automobiles that excel in weight reduction, allmanner of resin processing machines adapted to serving aplastic resource recycling society, and pressure vessels forhydrogen storage to support the hydrogen economy.

Social issues
and needs

Phases in
our history1945(electric vehicles, use of hydrogen energy)• Increasing LCD demand with thegrowing use of smartphones•P roblem of marine plastic pollution

Meiki Co., Ltd.

Plastic injection molding machines
Expansion of materials

Magnesium injection molding machines

Mechatronics technology

Excimer laser annealing systems

Expansion of product range
Expansion to secondary
processing equipment

Separator film manufacturing equipment for lithium-ion batteries

Film and sheet manufacturing equipment

Plastic extruders
Barrel processing
technologies
Lineage oftechnologies
and their
provision tocustomers andmarkets

Extruders for material and chemical recycling

Artillery production technologies
Manufacturing
technologies

Material manufacturing
technologies

Rotor shafts for power generation

High-pressure cylinders, reaction towers(e.g., for fertilizer)

Pressure vessels for oil refining
Manufacturing
Pressure vessels for use in nuclear power generation
technologies
Pressure vessel manufacturing
Artificial crystals
and high-pressure technologies
Pressure vessel technologies

Pressure vessel manufacturingand high-pressure technologies
Hydrogen handling technologies

Research on hydrogen in steel

Gallium nitride (GaN)
single-crystal substrates
Hydrogenpressure vessels

Hydrogen storage alloys

Special steel technologies
Material manufacturing
technologies

Thick plate rolling

Clad steel plates and pipes

Net sales

4 JSW Integrated Report 2022

JSW Integrated Report 2022 5

Message from the President“Material Revolution™,” making theworld sustainable and prosperous.

Toshio Matsuo
Representative Director & President
The Japan Steel Works, Ltd.

enabling separate functions to be performed to ensure
mutual checks and balances. In terms of specific measures,in June 2022, in order to strengthen the independence of thequality assurance functions of M&E, a change was made byconsolidating the quality assurance functions into a Quality
Management Department and placed under the directcontrol of the M&E president. Furthermore, in September
2022, the Quality Management Office was established as
an organization at Company headquarters, headed by the
director in charge of quality management and staffedwith the quality assurance managers from each plant,
to consolidate information on quality throughout thecompany and ensure thorough management. Efforts
are now underway to restructure the system so that it isessentially impossible to engage in inappropriate conduct
due to safeguards such as the separation of production
management functions of product departments, where

Compliance Month and strengthen education and training
sessions related to quality compliance in order to fostera serious attitude toward compliance. At the same time,
I believe that it is essential that this be accompanied by aclimate of openness that makes it possible for individuals tocall out that which they feel does not make sense. I will work
to revamp the Company culture by making a point of being
more involved in the workplace to use diverse opportunities
to both communicate the messages from top management
and listen to what employees have to say.
M&E possesses world-class technology and production
facilities, including some of the world’s largest production
facilities, such as a 14,000-ton large press, and stateof-the-art facilities such as a 150-ton ESR (electroslag)
melting furnace – in fact, M&E is the sole owner in Japan ofsuch technology and facilities. M&E supplies a wide rangeof products that support social infrastructure, including

authority had previously been concentrated.
Regarding the role of our own corporate culture andclimate, I recognize that there are employees who feel thatthe act of taking on challenges is not valued and that more
importance is placed on avoiding failure. I believe that it
is crucial for individuals to take on challenges and takeownership of the resultant failure as an asset, and that only
by overcoming aversion to it can we grow. I am committed
to transformations that make for a company culture that is
so open that supervisors who receive reports of failure canhonestly thank their charges who made the effort to try.
In addition, we will of course continue to observe a Quality

large cast and forged steel components used in power
generation and steelmaking, clad steel plates used in natural
gas extraction, desalination and petrochemical industries,
and pressure vessels used in oil refineries. As part of JSW
Group, M&E will carry through its commitment of achieving
reform of its quality assurance system and corporate culture
to regain the trust of customers and fulfill its responsibility tosociety by supporting the global infrastructure industry withadvanced technology.
p. 30 Response to Inappropriate Conduct in Quality
Inspections

Establishing a Purpose, Material Revolution™
In Response to Inappropriate Conduct in Quality Inspections by
Our Subsidiary
In May 2022, the Company made a public announcement
after the discovery that inappropriate acts, including falsification,
fabrication and misstatement of product inspection results,
had taken place at its subsidiary, Japan Steel Works M&E,
Inc. (hereinafter “M&E”). Given the high level of trust people
have in our products, this betrayal of that trust leaves us
with a sense of shame. We offer a wholehearted apology
to our customers and other stakeholders for any possible
disturbance we have caused them. It is with the utmost
seriousness that we accept the findings of the report ofthe investigation received in November 2022 by a special
investigation committee consisting of external attorneys,
and the Group is united in our efforts to make reforms thatregain the trust that has been lost.
Reforms will be implemented in terms of both structure
and culture. Whereas products of the Industrial Machinery
Products Business Segment tend to be assembled frommany parts, M&E’s products consistently remain a block
6 JSW Integrated Report 2022of steel from the beginning to the end of the manufacturing
process. Due to this product characteristic, the divisions
involved have been limited and authority tends to beconcentrated, a situation that appears to have triggered
the improper conduct. The concentration of authority in agiven department makes it difficult for a system of checks
and balances to function, a matter that we consider to be agroup-wide governance issue, rather than a problem limited
to M&E. As described below (see p. 11), we will continue
to strengthen governance of the Group, including theestablishment of a system of mutual checks and balances,
as a Materiality related to the management foundation.
Regarding this particular instance of inappropriate
conduct, we will reform the system so that no single
department manages everything from specifications
and delivery dates to even customer relations, in order
to transform the organizational structure so that it canguarantee quality from a company-wide perspective byWhen assuming the position of representative director& president in April 2022, I was given pause to think
once again about The Japan Steel Works’ very reason
for existence. When the Company was founded in
1907, society’s need for the finest state-of-the-art steel
was the key to Japan’s modernization, a demand theCompany responded to through continuous technologicaldevelopment. Then, after the Second World War, theCompany wasted no time in starting to focus on plastics
as a lightweight material to further develop, and in 1950
developed plastic extruders of our own, which were
integrated into Japan’s first petrochemical complex in
1958. Since that time, the Company continued to develop
technologies and equipment to meet the growing demandfor plastics, supporting Japan’s path from post-war
reconstruction to rapid economic growth, and achieving

PurposeMaterial Revolution™
“Material Revolution™,” making
the world sustainable and prosperous.

significant growth.
As I looked back on the work done, I reached theconclusion that the Group’s reason for existence has
consistently been its commitment to continue to resolve
social issues by striving for the innovation of materials andmaking for a more sustainable and prosperous society. Thisapplies equally to our current work with magnesium, carbon
fibers and gallium nitride (GaN) in that these too are materials
that will contribute to the realization of a carbon-neutral andsuper-smart society in the future. So the direction of theCompany remains unchanged.
After assuming the position of president, I communicatedthese personal views of mine to the Board of Directors,
and after about six months of repeated discussions, weestablished the Purpose and Vision that constitute the new
philosophy system for JSW Group that was announced
Benefiting all stakeholders by developing andVisionimplementing industrial machinery and newmaterials that solve social issues.

JSW Integrated Report 2022 7

in November 2022. The Purpose will serve as the criterion
for judgment and action for the Group to rally around as acohesive unit in response to future changes in the existing
business environment that are difficult to predict. It will also
help prevent the recurrence of inappropriate conduct byensuring that all officers and employees of the Group share
the Group’s reason for being and reaffirm the responsibility
they bear in providing society with products that are of thehighest quality.
In our march toward realizing this Purpose and Vision,
we will utilize the core competency we have developed
over the years to provide society with the unique value weoffer. The core competencies of the Group are technologies
for melting, mixing and solidifying, as well as machineelement technology and precision control technology. In thedevelopment of plastics processing machinery, we havemelted materials in the equipment, mixed them uniformly,
and solidified them into the desired shapes, technologies
to which we have added machine element technology andprecision control technology in order to respond to thediverse needs of customers in a wide range of industries.
Also, we have manufactured high-quality crystals for a wide
range of applications by adding precision control technology
to technologies for melting and solidifying raw materials incontainers. By further refining our core competence anddeveloping and implementing industrial machinery and newmaterials that resolve social issues – something we call the
Value Creation Process – we will continue to create social
value and enhance our corporate value on asustainable basis.

Contribution to a Low-Carbon Society
As there is continued anticipation of long-term expansion of
the electric vehicle (EV) market, demand for related industrial
machinery is expected to continue to increase. Demand
for separator film used in automotive lithium-ion batteries is
expected to double in the industry by 2025. In light of thesetrends in demand, the Group is moving ahead to jump-startplans to increase the production capacity of film and sheet
production equipment for lithium-ion battery separators, withthe aim of establishing an annual production capacity of 50
lines by the end of March 2023 and 60 lines by the end of
March 2024.
In addition, demand for highly recyclable and lightweight

Identifying Materiality to Promote the Creation of the Foundationfor Business Expansion
The Group’s results for fiscal 2021 showed an increase inboth revenue and profit, with revenue of ¥213.7 billion (+8.0%
year on year), operating profit of ¥15.4 billion (+51.2% year onyear) and net profit attributable to shareholders of the parent
company of ¥13.9 billion (+102.3% year on year). We expect
sales to reach a record high in fiscal 2022, as well as the finalyear sales plan envisioned in our medium-term management
plan JGP2025 (hereinafter referred to as Medium-termManagement Plan) in fiscal 2023. With the aim of further
increasing the corporate value of our group, we have set thegoal of growing into a ¥500 billion business group as the visionof what we hope to be in 10 years’ time, and will continue tobuild our corporate foundation to achieve this goal.

In November 2022, we identified and announced six
issues of Materiality (key issues) as themes that should beprioritized in order to realize our Purpose. In identifying them,sustainability of the Group has been pursued by establishing
as guiding perspectives of “creating value and solving social
issues through JSW Group’s businesses” and “bolstering
JSW Group’s management foundation for sustainablegrowth.” The issues of Materiality singled out as leading
to the creation of value and the resolution of social issues
through the Group’s business are the realization of a plasticresources-recycling society, contribution to a low-carbon
society, and contribution to a super-smart society.

Realization of a Plastics-Resources-Recycling Society
The first Materiality set forth is the realization of a plasticresources-recycling society. Plastic has relatively low
CO2 emissions and is used in all types of fields, including
automobiles, household appliances and medical equipment,
making it a material that provides support for a more
prosperous world. The amount of plastic used in the worldcontinues to increase and is forecast to reach 800 million
tons by 2040, about double the current level, and then 1.2
billion tons by 2060.
Against this backdrop, the Group aims to achieve
further growth in the plastics-related business, not only
through involvement in the manufacture of plastics, butalso by providing machinery that facilitates the recyclingof resources in the march toward a circular economy.
The Group is moving forward with the development of

8 JSW Integrated Report 2022

its own manufacturing and processing technologies forbiodegradable plastics and biomass plastics, as theirproduction methods and molding and processing conditions
differ from those of conventional plastics. In November
2022, our development system was strengthened withthe completion of the Technology Development Centerfor chemical recycling in the Hiroshima Plant. Throughthe development of extruders for material and chemical
recycling, injection molding machines for recycled plastics
and other machinery, we will continue to promote the threeR’s (Reduce/Reuse/Recycle) + Renewable (renewable
resources) to contribute to the realization of a plasticresources-recycling society. We believe this will help reduce
CO2 emissions and maintain biodiversity.

magnesium alloy parts is expected to increase in line withthe reduction of the weight of automobiles. Whereas diecasting methods of production had been the norm, theGroup was the first in the world to develop and offer the
supply of magnesium injection molding machines thatmake precise use of the thixotropic phenomenon to moldmagnesium under low-energy and low-environmental-impact
conditions by means of injection molding. In November
2022, we launched large magnesium injection molding
machines capable of molding larger parts. We are engaged
in initiatives to increase production capacity with a view tofurther utilizing magnesium alloys, such as for application

investment in response to the shift to EVs. That accounts

in large automotive parts. In addition, we will promote thefor the July 2022 establishment of our overseas production

development and diffusion of industrial machinery for thebase for injection molding machines in Poland, following

social implementation of lightweight materials such as

those in China and the U.S., with full-scale operations

cellulose nanofibers and plastics reinforced with carbon

expected from 2023 onwards. At this production base, infibers, thereby contributing to the realization of aaddition to supplying small and medium-sized machines,

low-carbon society.

which are in demand in a wide range of fields such as

We will also continue to channel efforts into expanding

containers, medicine and electronics, we will build a systemsales of electrically powered injection molding machinesthat can supply large machines to the automotive industry

that offer superior energy-saving and environmental

with quick delivery times. Though the Company alreadyperformance. Currently, demand for electrically powered

boasts the top share relative to other Japanese injection

injection molding machines is growing rapidly in Europe

machine manufacturers in the European market, there is stillas there is an increased move toward carbon neutrality

room for increasing our share among the larger field that

as well as the onset of surging electricity prices. It is also

includes overseas manufacturers as well. We will furthera region where car manufacturers from various countries

increase our sales volume in the European market by 2025

have established manufacturing bases and there is capitalin response to the strong demand there.

JSW Integrated Report 2022 9

Contribution to a Super-Smart Society
As demand for electronic devices such as PCs andsignificant energy savings. Under Strategic Innovation

smartphones is expected to further expand with theProgram for Energy Conservation Technologies, a project

acceleration in digital transformation, there will be increasedby the New Energy and Industrial Technology Development

demand for all-encompassing personal connectivity to

Organization (NEDO), the Group started demonstration

networks and high-speed, high-capacity communications

experiments in 2020 to mass-produce gallium nitride crystals

such as 5G/6G.

by applying the technology already possessed to crystallize

The Industrial Machinery Business of our group handles

synthetic quartz crystals under high temperatures and highexcimer laser annealing systems, vacuum laminators,pressure. Then, in May 2021, we started operations of ahot presses, and ECR deposition systems as equipment

large-scale demonstration facility that led to the successful

involved in the manufacture of devices and semiconductors

production of 4-inch gallium nitride substrates. Furthermore,that make up this kind of digital infrastructure. Our strength

we accelerated efforts to ship samples during fiscal 2022,

lies in our technical capabilities to realize customers' needs

and we will contribute to the realization of a super-smart

into manufacturing equipment by utilizing our abundantsociety through mass production.

experience and advanced technological capabilities,
especially in precision control technologies such as precisiontransport and precision positioning.
And the Group’s new businesses promote the

I tell our employees that they need the power of dreams,
enthusiasm and persistence as they work toward realizing
the Purpose and further business growth. While the Group’s

development of energy-saving materials such as gallium

employees do indeed possess the power of dreams andnitride substrates for mass production, surface acoustic

enthusiasm, I feel that they lack persistence due to thewave (SAW) devices used in smartphones and all manner ofinclination to rest on their laurels once a measure of growthbonded substrates that are used in optical communications

has been achieved. Many of the Group’s products take aand optical modulators.

long time from initial development till reaching the market.

Gallium nitride is attracting attention as a material for laser

And many of the businesses we are currently offering have

diodes, high-frequency devices and high-voltage power

not been able to see the light of day until years of hard work

semiconductors because it offers lower resistance andwere first achieved. I believe that it is important to continue

higher-speed operation than silicon, which is the current

our efforts with persistence to establish the new businesses

mainstream material, not to mention its ability to achievethat will propel the Group to its next stage of development.

Promoting ESG Management and Strengthening Our Management
Foundation in the March toward Sustainable Growth

The Materiality we have set forth for “bolstering JSWGroup's management foundation for sustainable growth” are“human capital improvement and diversity and inclusion,”“investment in the future with innovation management,” and“governance reinforcement of JSW Group.”
We will give top priority to “human capital improvementand diversity and inclusion” for the creation of innovations
for further growth and strengthening of our managementfoundation as we work toward new value creation. A lackof diversity would both hinder innovation and make foran organization that runs the risk of taking on a form ofhomogeneity that breeds subservience and misconduct.
We will accelerate our investment in people as we movetoward the acquisition and development of diverse humanresources. At the same time, we will build a corporate
culture of openness and psychological safety so that we
make the most of our human resources.
With regard to “investment in the future with innovation
management” the Group will strengthen its R&D systemand production capacity, leverage M&A as well to expand
its business and promote digital transformation in orderto further enhance its competitive advantage. The growthof the Industrial Machinery Products Business Segment,
currently the very core of the Group, is the result of many
years of investment. We are compelled by a strong sense ofurgency to invest in the new precisely because we are now
enjoying favorable performance. To do otherwise would mean
missing the opportunity to both refine our core competence

meeting bodies has been discontinued and their roles haveto further enhance our technological advantage and utilize

been clarified. At the same time, there has been the newdiversity to create innovation, the very pillars we will need toestablishment of a Liaison Council of Outside Officers todevelop new business for the next stage of growth.

report to and brief outside officers. Through this council,

The ability to invest in people and invest in the future

more animated discussions at Board of Directors meetings

is contingent on the kind of “governance reinforcement

and other supervisory bodies will make it possible forof JSW Group,” which includes the quality assurance

deliberations in greater depth to take place.

system described at the beginning of this section. We will
In order to focus more on value creation through businesses

director in charge of promoting ESG was launched in April

fundamentally review conditions reflective of insufficientand to strengthen the management foundation for sustainable

2021. And in April 2022, the ESG Promotion Office wascooperation between divisions, overly concentrated authority

undergoing significant change, the direction in which we

growth, we are promoting ESG management, which is a basic

established to promote company-wide ESG activities.

in particular product divisions and inadequate of corporate

should proceed is evident. Our newly established Purpose,

policy in our Medium-term Management Plan. Recognizing

With the ESG Promotion Office and the ESG Promotion

control having been proven effective. In doing so, we will

Vision, Value Creation Process and Materiality providethat ESG activities are an important management issue, we

Committee in central roles, cooperation between Headgo beyond mere quality assurance to promote reforms thata massive compass to guide us. As we work toward

are engaging in diverse initiatives in each of the areas of the

Office divisions, business divisions, plants, and Group

strengthen head office functions such as internal control and“Material Revolution™,” making the world sustainable andenvironment, social and governance through means suchcompanies has been deepened and ESG activities are being

risk management, strengthen cooperation between divisions

prosperous,” the entire Group will coalesce as one to work

as production activities with environmental conservation ineven more actively promoted. In the area of dealing withand establish functions for mutual monitoring.

together on reform initiatives that regain the trust that has

mind, the development of environmentally friendly products,

the environment, in June 2022, we expressed our support

the nurturing of human resources that contribute to building

Though the environment in which the Group operates is

As for the management structure, the number of inside

been lost and prevent the recurrence of improper conduct

for the TCFD (Task Force on Climate-related Financial

directors has been reduced by one, and three out of eight

so that we continue to fulfill our responsibility as a suppliera sustainable society, and the establishment of a transparent

Disclosures) recommendations. As we analyze and study

directors have been outside directors, increasing the ratio

to our customers. And we will make a point of reporting tomanagement system.

the impact of climate-related risks and profit opportunities onof outside directors from 33.3% to 37.5%. In addition, toupdate on the steady progress we make.

Based on the aim of promoting ESG activities smoothly

matters such as our own business activities and earnings,

strengthen the function of management monitoring andI wish to offer thanks to all of our stakeholders for theand effectively in a company-wide and cross-organizational

we are working to expand our information disclosure in line

improve the effectiveness of the Board of Directors, thecontinued guidance and encouragement you provide.

manner, a ESG Promotion Committee chaired by thewith the TCFD disclosure framework.

practice of outside directors participating in executive-side

10 JSW Integrated Report 2022

JSW Integrated Report 2022 11

JSW Group
Value Creation
Process

Material Revolution™

PurposeBenefiting all stakeholders by developing andVisionMaterial Revolution™,materials that solve social issues.

making the world sustainable and prosperous.

Capitalimplementing industrial machinery and newBusiness Model

Outputs

Outcomes

As of March 31, 2022

Financial capitalM anufactured
capitalMelting, Mixing,
and Solidifying
Technologies

M a n ufact

Human capitalJ SW Group employees: 5,329• 
Non-consolidated JSW
employees: 1,767• Engineering career-track
employees (non-consolidated):807• 
Training facilities for skills
transfer: 2

uri•Machine Element
Technology
Precision Control
Technology

ng

T

ec

hn

olo

Resolution ofSocial Issues• Industrial Machinery• New Materials

hnologyTec apital investment:C¥4,903 million• 
Plants: 3 locations• 
Test centers: 3 plastic
machine locations, 6 molding
machine locations• 
Sales locations and Group
companies covering major
market regions in Asia, North
America and Europe
•

ign
es
D

Ma
ter
ial
CompetenerceCo hareholders’ equity:S¥146,765 million• 
R&I rating: A (stable)•

Sustainable
society ontribute to the expansion of ourCcustomers’ business opportunities•
Resolve issues faced by ourcustomers•Contribute to reducing
environmental impact•

Employees

Prosperous society work environment with job
Asatisfaction and excitement•Growth as a highly skilled
professional(resolution of social issues such as thehealth of people, medical care, food,and energy)•

Plastics
MachineryBusiness partners

Mitigating climatechange reat all business partners fairlyTand impartially, and always
conduct transactions in good faith•
Build partnerships to create
corporate value•

Injection Molding
Machines

Shareholders andinvestorsgyMedium-to-long-term enhancementof corporate value•Stable shareholder returns•

Other
MachineryIntellectual capital esearch and development
R
expenses: ¥4,909 million• 
Patents held: 948 in Japan,
667 overseas

Customers

Creation ofsocial value•

Material andEngineering
Services

Realization of a plastic-resource-recycling society
Contribution to a low-carbon society• Contribution to a super-smart society• ong-term and stableL
relationships with customers• Good relationships with local
communities around plantsN atural capital

Human capital improvement and diversity and inclusion
Investment in the future with innovation management• Governance reinforcement of JSW GroupNew
Businesses••

Solving the waste plastic problem(formation of a circular economy) evelopment of recycling and wasteDtreatment businesses• 
Shift away from fossil-fuel-derived plastics• 
Conversion to biodegradable plastics•

Carbon neutrality by 2050
 dvancement of lithium-ion and otherA
storage batteries• 
Expansion of nature-derived energy• E xpansion of hydrogen and ammonia businesses• 
Decline of the natural gas business• U ncertain trends in nuclear power generation•

 nergy and resource conservationEin production activities (reduction of
CO2 emissions)•
Reduction of CO2 emissions throughour products and businesses•

Bolstering JSW Group’s management foundation forsustainable growth nergy consumption: 2,878 TJ
E• 
Water intake: 16.91 million m3

 ontribution to the local economyCthrough employment andprocurement

Global environment••

12 JSW Integrated Report 2022•

Creating value and solving social issues through JSWGroup’s businesses•

The Environment
in Which JSW
Operates

Local communities

MaterialityS ocial relationshipcapitalSustainableenhancement ofcorporate value

Advancement toward digitaltransformation, AI, and IoT
 ransformation of our business models andTwork styles• 
Full-scale investment in related infrastructure•

Low birthrates and aging
populations in developed
countries•

Global population growth•E xpansion and diversification of consumption,
especially in emerging countries

 hrinking domestic market, shrinking
Sworkforce

JSW Integrated Report 2022 13

capabilities that enable us to take on singlehandedly everything fromSpecial Feature: “Comprehensive
the development of core materials to provision of the world’s finest final products”
that handles all ultra-high speed and high-precision movements ofthe screw, such as rotation, forward movement, and braking.
In addition to research, development, and design of magnesium
injection molding machines, our production facilities, manufacturing
and processing technologies, and technicians at our manufacturing
sites possess the manufacturing technology to take on everythingfrom casting, machining including welding, assembly, inspection,and test operation.
Furthermore, not only does MG Precision facilitate application
development and user-oriented improvements, but also
contributes to implementation in automobiles, home appliances,and other products through contract molding.
This is how we combine our core competence with our strengths
in material design technology and manufacturing technology to
go beyond just developing processes, designing equipment anddesigning control systems, to achieve the material developmentof core components that are manifested as end products,
manufactured using the Group's own production facilities andproduction technology. The greatest strength of the Group is
our comprehensive capabilities that enable us to takeon singlehandedly everything from the developmentof core materials to provision of the world's
finest final products.

Melting, Mixing, andSolidifying Technologies

Liquid phaseTIn-house production of key components and equipment using production equipment, manufacturing/processing technology,
and skilled workers at our own manufacturing sites• 
Manufacturing technology that takes on everything from conceptualization, research, development, and design to machining,assembly, inspection, and test operations• 
MG Precision Co., Ltd., provides contract molding of magnesium parts (automotive parts, etc.). Customer feedback is used to
inform equipment development
Providing society with magnesium injection molding machines that meet the demands of the market
•

hn

Co
olo

re C

gy

o m p eten

Magnesium injection molded
product

Ultra-high speed shot system

Tie barMagnesium alloy chips
Die
HeaterhnologyTecng

Manufacturing TechnologyecSolidifying

Magnesium in semi-molten state

Ma
ter
ial

Machine Element
Technology
Precision Control
Technology

uriJ SW’s own original injection control system that realizes
ultra-high speed injection and rapid braking• High-performance dedicated controllers that maximize easeof use•MixingMagnesium alloy chips

Melting, Mixing,
and Solidifying
Technologies

M a n ufact

Mold clamping devices with maximized highrigidity and light weight

Solid phase

Screw stirs and homogenizes magnesium alloy•

Precision Control Technology

Solid phase Liquid phase

Melting

Machine Element Technology
J SW’s own original machine structure based on accumulated
expertise in plastic injection molding machines• 
Cylinders made of heat-resistant alloys developed by JSW• Screws for dedicated use on magnesium alloys developed
by JSW• 
Mold clamping device with maximized high rigidity andweight reduction achieved through numerical analysis

Thixomolding Process
Magnesium alloy chips are heated in a cylinder to a semi-molten state andstirred and homogenized by rotating a screw. The screw then conveys forward at
an ultra-high speed the magnesium alloy, which is made to flow easily by utilizing
the phenomenon that decreases the viscosity when shear stress is applied(thixotropy) to inject it into a mold, where it is cooled and molded into shape.

ign
es
D

The industrial machines and new materials which are the final
products of JSW Group are created by combining its corecompetence−i.e., technologies for melting, mixing, and solidifying
and machine element and precision control technologies−with thematerial design technology and manufacturing technology that it
has cultivated over many years. To explain about this, we will use
a magnesium injection molding machine as an example.
Magnesium is a material that is even lighter and stronger thanaluminum. Its adaptation for in-vehicle parts makes for better fuelefficiency. It is also highly recyclable, which is why it is a material
that has started to be used in earnest. Magnesium alloy is melted
inside a cylinder at temperatures exceeding 600°C, mixed byrotating a screw, and then poured into a mold in a manner similar
to a syringe by advancing the screw at ultra-high speed and thencooled to solidify it.
The greatest feature is thixomolding, a process that was
introduced from the United States. We have put this process
to practical use by making full use of our core competence, thetechnologies of melting, mixing, and solidifying. The cylinder andscrew, which are the core components, are made with heatresistant alloys we developed independently by material design
technology, a strength of the Group. Our core competence ofmachine element technology is utilized in the equipment structure,
while our precision control technology is utilized in the controller

Rotating device

PistonScrew

Material Design
TechnologyceNozzleCylinderFixed Platen

Movable Platen

Screw and cylinder materials(JSW-developed materials that can be used regularly attemperatures exceeding 600°C)

Display meter panel
ECU case• Console• 
Head-up display
etc.
•

MG Precision Co., Ltd.

•

Automobiles

CamerasIndustrial
machines

Magnesium
injection molding
machines

Materials

Magnesium alloy
injection molded
products

PCs, tablets

Socialimplementation••

Smartphones

Automobiles
Home appliances, etc.

 ightest weight practical metal with excellent
Lrelative strength• Excellent recyclability• 
Excellent dimensional accuracy and mechanicalproperties relative to die-cast products•

Hiroshima Plant, The Japan Steel Works

14 JSW Integrated Report 2022

MG Precision Co., Ltd.
(molding and machining of magnesium parts)

JSW Integrated Report 2022 15

Materiality (Important issues)
We identified six issues (i.e., Materiality) as themes that should be prioritized in order to realize our Purpose at the Board of
Directors meeting in November 2022.

Materiality

value and solving social issues through JSW Group’s businesses” and “bolstering JSW Group’s management foundation
for sustainable growth.”
activities in order to resolve the issues.

Realization of a
Plastic-ResourcesRecycling Society

Materiality Identification Process
Comprehensive identification of social issues drawn from megatrends andinternational frameworks and guidelines

1: Important materiality candidates

STEP

2

STEP

The materiality candidates which were narrowed
down were broadly categorized into the areas of“creating value and solving social issues throughJSW Group’s businesses” and “bolstering JSWGroup’s management foundation for sustainablegrowth.” The materiality candidates were scoredvia internal questionnaire thereby identifying themore important materiality candidates.

Social needs

Scoring of materiality candidates to identify
the more important ones

Affinity with our business

Creating value and solvingsocial issues through JSWGroup’s businesses: Important materiality candidatesDegree of importance to stakeholders

STEP1) The value chain as a whole was observed to comprehensively single out the materiality candidates and create
a long list of those candidates.
–R egarding Materiality from the viewpoint of investors (i.e., issues pertaining to the non-financial factorsthat are linked to the management foundation), a cluster of materiality candidates was extracted bycrosschecking with matters such as the criteria used by ESG assessment organizations.
–R egarding Materiality from the viewpoint of multi-stakeholders, a cluster of materiality candidates was
extracted from criteria deemed important to the medium-to-long-term business model of JSW Group while
also taking into consideration resources such as the United Nations Environment Programme FinanceInitiative’s (UNEPFI) Impact Radar.
2) Materiality candidates were narrowed down and shortlisted based on an importance assessment.

4
STEP

5

16 JSW Integrated Report 2022

Contribution toa Super-Smart
SocietyMultiple discussions about Materiality were held at the management level over a period of ahalf year, including participation by outside directors, as work was done to confirm the level ofimportance to JSW Group’s business and management foundation

Finalized the Materiality and received approval from the Board of Directors

Related SDGs

Renewable• 
Contribution to the greater use of non-fossil-fuelAs JSW Group aims to be an unprecedented generalderived plastics– Twin-screw extruder (TEX)
manufacturer of plastic processing machinery in the
Reduceworld, it is extremely important to supply society• 
Reduce the amount of plastic usedwith all manner of plastics processing machinery– Plastics processing machinery for cellulosethat not only makes plastics but also realizes 3Rs +nanofiber reinforced plastics
Renewable, a goal which is indispensable for resource– Injection molding machine for foamed plastics
recycling.
Since JSW Group can leverage its core competence • Contribution to the reduction of marine plastic waste– All manner of plastics processing machinery forto the maximum, it can demonstrate our strength inbiodegradable plastics
the development and creation of plastics processing
machinery that meets the demands of society. This is Recycle•
Contribution to the spread of recycling as a practicealso a high-priority business expansion opportunity for– TEX for material and chemical recycling
JSW Group.
– Injection and blow molding machines forrecycled plastics
The realization of a low-carbon society is one of themost important challenges faced worldwide. Products
created by JSW Group’s industrial machinery andproducts equipped with its new materials havecontributed to the reduction of CO2 emissions. The
demand for such products is expected to increase
further in the future, which makes it a matter of highimportance for the Group.
In addition, responsibilities of the Group include
the reduction of energy consumption of its industrial
machinery products and the curbing of CO2 emissions
from the operations of its manufacturing sites.

Zero CO2 emissions• 
Contributions to the popularization of electricvehicles (EVs)– Film manufacturing equipment for use in lithiumion battery separators– Lightweight on-vehicle parts (e.g., magnesium
injection molding machines, etc.)
Reduction of CO2 emissions• 
Reduction of energy consumption by industrial
machinery products• 
Reduction of CO2 emissions resulting from businessactivities

The super-smart society is expected to resolve social
issues in all fields, including medical care, food, theenvironment, energy, and disaster preparedness.
In order to realize a super-smart society, it willbe essential to build a 5G/6G-compatible digital
infrastructure capable of processing massive
amounts of data at high speeds and with low energy
consumption.
The industrial machinery and new materials of JSW
Group are incorporated into the key components ofthe devices that make up the infrastructure, and could
potentially be indispensable to the realization of asuper-smart society. This is also considered to be ahighly important business expansion opportunity for
the Group.

Infrastructure equipment that is higher performanceand more energy saving• 
Higher performance and more energy-saving ofarithmetic and memory devices– Equipment involved in the manufacture ofelectronic devices– Gallium nitride (GaN) substrates
Input/output terminals that offer higher
performance• 
Increased performance of smartphones, tablets,PCs, etc.
– Equipment involved in the manufacture of displays
and electronic components– Substrates for SAW devices

Bolstering JSW Group’s Management Foundation for Sustainable Growth
Human Capital
Improvement andDiversityand Inclusion

Grouping of similar and more important materiality candidates in the areas of “creating value
and solving social issues” and “bolstering the management foundation”

3
STEP

Contribution to
a Low-Carbon
Society

Degree of influence on management

Bolstering JSW Group’s
management foundation forsustainable growth

Examples of initiatives

Creating Value and Solving Social Issues through JSW Group’s Businesses

In order to make the world sustainable and prosperous, we evaluated Materiality from the stated viewpoints of “creating

Recognizing the importance of the identified Materiality, JSW Group practices effective management and business

Reasons why considered to be ofhigh importance

Investmentin the Futurewith Innovation
Management

GovernanceReinforcement of
JSW Group romotion of the acquisition and development ofPdiverse human resources
Acquisition: Proactive recruitment of core humanresources, including executive-level personnel
Improvement of compensation to acquire
human resources with strong expertise
Development: Early identification and selection ofyoung high-performers•

The diversification and expansion of our humancapital, including the human resources capable ofdriving the Group’s growth, generating innovation,and creating value, is a matter of the highest priority
and importance for strengthening JSW Group’s
management foundation.

In order for JSW Group to continue contributing tosociety in the future, it is essential to maintain andstrengthen its technological superiority by refining its
core competence and expanding its business.
Innovation is another essential factor forsustainable growth. It is important to promote digitaltransformation which supports data-based, rapid
decision-making, business model innovation, and thecreation of new value.
For the sustained growth of JSW Group, it isimportant not only to further strengthen complianceand governance, but also to engage in dialogue
with customers and investors as well as employees,
business partners, and other stakeholders.
In addition, supplying society with industrial
machinery and new materials of high quality andsuperior reliability is the very foundation of JSW
Group's business and important to the further
strengthening of its quality assurance structure andsystem.

 trengthen core competence by boosting R&D
S
systems• 
Increase production capacity and expand businessthrough M&A• Completion of goals of the digital transformation
promotion plan• trengthening complianceS– Expansion of compliance lines in Japan andoverseas• Strengthening of Group governance– Review of reporting lines• 
Promotion of stakeholder engagement• 
Strengthening of quality assurance structure andsystems•

JSW Integrated Report 2022 17

Progress of the Medium-Term Management Plan JGP2025
Based on the position of the current medium-term
management plan JGP2025 as an important five-year period
for laying the foundation for “growing to a business scale of
300 billion yen” from fiscal 2026 onward, we are promoting
activities that move us “towards the unprecedented generalmanufacturer of plastic processing machinery in the world,”
the first of our basic policies.
Despite fears that demand for plastics processing
machinery would decline due to the shift away from plastics,
in fiscal 2021 the trend toward carbon neutrality, including

New Developments

the accelerated shift to EVs and continued demand formore fuel-efficient automobiles (due to vehicles being
made of lighter weight from the use of plastics), resulted inrobust demand for plastics processing machinery. To takeadvantage of this opportunity, in fiscal 2021 we started work
ahead of schedule to strengthen our production system forfilm and sheet production equipment for separators, andalso opened a base in Europe to boost our injection molding
machine production and service offerings.

JGP2017

Expansion of the production network for film and sheet
production equipment
As expectations increase in the shift toward replacing conventional automobiles
with EVs, demand for lithium-ion batteries is increasing significantly at a rate
quicker than anticipated. This has been accompanied by demand for film and sheet
manufacturing equipment for separators that is expected to double by 2025 fromits 2021 level. For this reason, we have started to boost the manufacturing capacityof our equipment ahead of schedule.
Estimated number ofEVs (PHEVs + EVs) manufactured

JGP2020

From April 2015 to March 2018

From April 2018 to March 2021

Advancing toward top global &niche corporate group

JSW forecast

JGP2025

From April 2021 to March 2026

Building foundations for the solid growth of
JSW Group in the next ten years(Thousands of units)

Towards the unprecedented general manufacturer ofplastic processing machinery in the world

50,000

Basic Policy

30,000

Towards the unprecedented general manufacturer of plastic
processing machinery in the world• Continuing to expand production capacity (60 lines/year) of film
and sheet production equipment for manufacturing separators forautomotive batteries, for which demand for use in electric vehicles(EVs) is expected to increase significantly• 
Expand the target market for film and sheet production equipment forcapacitors (electronic components) and other applications• 
Opened Recycling Technical Center (RTC) at Hiroshima Plant to work
on chemical recycling (November 2022)• 
Developed a world-standard twin-screw extruder that is currently
being made available in Chinese and Southeast Asian markets• Completed development of and launched in November 2022 largesized magnesium injection molding machines (clamping force of 3,000tons), for which demand is expected to increase as there is increased
demand for lighter weight automobiles• 
Established a production and service base for injection molding
machines in Europe, expecting full-scale operation from 2023

20,000

Separator film production capacity(billion m2)
30

Market based (2020 forecast)Market based (2021 forecast)
Policy based (2020 forecast)
Policy based (2021 forecast)20

40,0000Basic Policy/Achievements [] and Issues [ ]Basic Policy/Achievements [Increase profitability of existing businessesImproved productivity and reduced cost of film and sheet
manufacturing equipment and injection molding machines throughcapital investment
Advanced the Muroran Plant restructuring project

Optimization of management resources and strengthening of alliances
Expanded plastic processing machine complex (absorption typemerger of Meiki Co., Ltd.; acquired GM Engineering Co., Ltd. as a subsidiary) stablishment of Japan Steel Works M&E, Inc. (spun off theE
Material and Engineering Business Division)B egan collaboration with Tsukishima Kikai Co., Ltd. and establisheda joint venture with JX Nippon Mining & Metals Corporation

Foster new products and businesses and make themcompetitive as soon as possible
Reorganized the Research and Development Headquarters
General delays in fostering new businesses

Strengthening of after-sales services (stock-based business)Establishment of parts centers in Japan and Europe, constructionof dedicated service center
Start operation of remote maintenance system
Acceleration in exploration and development of new businesses
Commercialized hydrogen-related business and transferred toJapan Steel M&E, Inc.
Promoted early commercialization of profitable businesses byfocusing on photonics, composite materials, and metal materials
Yet to create new core businesses
Insufficient for further expansion of plastic processing machinerycomplex

Reinforce Group management and promote alliances
Although progress made in small-scale business acquisitions,further need to strengthen alliances

FY2015Net Sales(Billions of yen)

Operating income(Billions of yen)

Operating income ratio
ROE

FY2016FY2017] and Issues [ ]JGP2017

FY2018

Final year targets

223.3

212.4

212.9

220.0

Net Sales

14.4

12.3

21.3

13.0

Operating income(Billions of yen)(Billions of yen)

FY2019FY2020JGP2020
Final year targets

220.1

217.5

198.0

260.0

24.2

18.7

10.2

30.0

6.5%

5.8%

10.0%

6.0%

Operating income ratio

11.0%

8.6%

5.2%

11.5%

– 13.5%– 4.6%

9.6%

8.0%

ROE

16.3%

7.2%

5.1%

14.0%

Business Weighting (Net Sales by Segment)
Industrial Machinery Products Business(Billions of yen)

Material and Engineering Business

Make constant profit in the Material and Engineering Business• 
Promote review of product portfolio for high profitability in cast andforged steel products
Create new core businesses• 
Further enhance the product lineup in the electronic device-related
equipment business by developing and launching products such as
next-generation semiconductor-related equipment• 
Began operation of large-scale demonstration equipment for the mass
production of gallium nitride (GaN) substrates, and continued efforts toship samples throughout fiscal 2022
• 
Completed and started operation of one of the world’s most advanced
copper alloy material production facilities
Implementation of ESG management• 
Established a new ESG Promotion Office to strengthen initiatives• 
Announced endorsement of the TCFD (Task Force on Climate-related
Financial Disclosures)• 
Established JSW Group corporate Philosophy, starting with Purpose• 
Identified Materiality as priority issues to be addressed to realize the
PurposeApprox.
2 times

10

2021

2025
* JSW estimate

Considering lead time, by 2025
market demand is expected to be
80-100 lines/year andorders received 50-60 lines/year.

10,00002020 2021 2022 2023 2024 2025

2020

2030 (Year)

JSW response* JSW researchWorking ahead of the original schedule,
Positive terminal

Anodeestablish a 50-line system by March 2023
establish a 60-line system by March 2024

Negative terminal

CathodeSeparator

Lithium-ion battery structure

The separator is a plastic film that plays
an important role in preventing contact
between the cathode and anode whileallowing lithium ions in the electrolyte
to pass through.

Established a production and service base for injection molding
machines in Europe
Electric injection molding machines consume 67% less power than hydraulicinjection molding machines (by JSW comparison). Since the electrification rate of
injection molding machines in Europe is less than half that of Japan, this percentage
is expected to increase in the future. This is why we opened a base in Europe toboost our production and services there. We aim to expand our market share,
focusing on large-size machines, a particular strength of ours.
Electrification rates of molding machines

European market share

Units made in Japan Electrification rate of small/medium-sized machines
Units made in Japan Electrification rate of large-size machines
Units made in Europe Electrification rate of small/medium size machines
Units made in Europe Electrification rate of large-size machines

100%

50%

JSW share
2-3%

Electrification rate is
expected to increase in
the futureMarket size of
10,000 units/year in
Europe as a whole

0%
2010

2012

2014

2016

2018

2020 (Year)* JSW research

JSW response
Production and service base established near Warsaw, Poland (total area: 3,350 m2)

150.0
121.9
100.0
77.3

112.9
97.6

113.9
105.0

130.1

144.3
118.3

170.2

173.6

171.4

156.3

66.2

74.8
51.2

50.0

40.8

41.2

42.8

FY2021 Results

FY2025 Plan

Change from
FY2019Net Sales(Billions of yen)

213.7

270.0

+ 24%

Operating income(Billions of yen)

15.4

27.0

+ 44%

Operating income ratio

7.2%

10.0%

+ 1.4PP

ROE

9.6%

10.0%

+ 2.8PP

171.1

126.3

88.2
67.6

159.3

38.5

40.0

2020

2021

0
2009

2010

18 JSW Integrated Report 2022

2011

2012

2013

2014

2015

2016

2017

2018

2019

(FY)

Power consumption (kWh)200.0

67% less than hydraulic type(by JSW comparison)
Contributed to a tremendous
reduction in power consumption(CO2 emissions reduction)
Hydraulic type

Electric type

JSW Integrated Report 2022 19Strategy by Business

Plastics Machinery BusinessBusiness Overview
The Plastics Machinery Business Division manufactures,
sells and provides maintenance services for an array ofplastic production and processing machinery (pelletizers,
twin-screw extruders, and film and sheet manufacturing
equipment, spinning extruders, etc.) used in various upstream
and downstream processes in the manufacture of plastic
products. The plastic raw materials and film products
manufactured using our machinery and equipment are used

Operating Environment
in key components of a variety of products, including IT
products such as 5G smartphones, personal computers,
tablet devices and keyboards; electronic materials such as
capacitors, condensers and semiconductor products as well
as home electric appliances; lithium-ion batteries; automotive
parts; food packaging film and containers; and catheters andother medical instruments.

Top Commitment

Message from the Head of the Division
Towarda carbon-neutral society in 2050, needs for things such as lighter, more fuel-efficient automobiles, EVs (electric

As plastic products have many excellent properties,
including formability, insulation capacity, lightness, and costeffectiveness, we recognize the indispensable role the willcontinue to play in the world but are also cognizant that ourenvironment poses both opportunities and risks.
One key opportunity that can be sited is the accelerating
shift to EVs as the preferred type of automobile as we march
toward a carbon-neutral society. With the accompanying
increase in demand for lithium-ion batteries a tailwind forus, the manufacturer with the top share in the global market
for separator film production equipment, we are working tofurther expand our market share by increasing production
capacity. In addition, we will endeavor to strengthen our aftersales service. Extending the service life of our products asprocessing machines enables us to reduce the resultant CO2

emissions generated during manufacturing of the machines.
We believe that these are important activities that we can offer
in the march toward a carbon-neutral society.
On the other hand, a major risk to highlight here is the
problem of marine plastics and waste plastics that has comeinto focus. And yet, we believe that this issue can also be an
opportunity for us if we apply our core competence toward
solutions while also fulfilling our roles and responsibilities as acomprehensive plastics processing machinery manufacturer
that works to realize a plastic-resources-recycling society.
Over the medium to long term, we also anticipate thatdemand for separator film production equipment will shrink
due to the spread of solid-state batteries and other products.
In response to this, we are working to transition our film
production equipment into other fields.

vehicles)that contribute to decarbonization, and various equipment related to plastic recycling are heightening. With astrongdemand for plastics processing machinery in the global market in fiscal 2021, we saw orders double year-on-year toover
100 billion yen, a record high for us. In fiscal 2022, demand for lithium-ion batteries is expected to increase significantlyandahead of original estimates due to the worldwide shift to EVs, while demand for manufacturing equipment for separatorfilm
 used in batteries continues to grow, and we anticipate orders for large projects for pelletizers to exceed those receivedin fiscal 2021. At the same time, we recognize that there are ever growing expectations from society at large in our supplyof provide plastics processing machinery that realizes 3Rs + Renewable, an indispensable practice for the recycling ofplastics
resources. As an industry leader, we will promote the social implementation of plastic materials through the Material
Revolution™
while doing our part to protect the global environment and contribute to the realization of a sustainable,
prosperous,
carbon-neutral society that can coexist with the use of plastics.
Strategy and Measures for Growth
In the new medium-term management plan JGP2025, thePlastics Machinery Business is positioned as a business thatwill create profit and drive growth as JSW’s core business.
Specifically, with the aim of becoming a comprehensive
plastics processing machinery manufacturer, we will further
strengthen the competitiveness of our equipment and expand
our business through aggressive capital investment and bothcollaborations and alliances. At present, we are also working
to optimize sales prices.
We are also engaged in the promotion of energy
conservation through weight reduction by utilizing plastics,
as well as in the recycling of plastics. In November 2022, on

the premises of our Hiroshima Plant we opened the Recycling
Technical Center (RTC) to work on chemical recycling that
employs twin-screw extruders. We will work together with ourcustomers to expand our business value while contributing
to the realization of a low-carbon society not only throughthe realization of a carbon-neutral and plastic-resourcerecycling society, but also by reducing power consumption ofequipment and waste plastics generated through the startingand stopping of equipment operations. By leveraging thecomprehensive capabilities of JSW Group companies, we will
respond flexibly and quickly to changes in the global market.

• Cumulative original technology and knowledge• Lineup of plastic processing machinery to meet

S
Strengths

SWOT
Analysisdiverse needs• Production system that makes possible in-houseintegrated production of large equipment• Technical centers in Japan and overseas
equipped with a wide variety of testing
equipment

W
Weaknesses• Long delivery times due to production ofsmall-quantity orders with a high emphasis onlarge machines• EV market expansion (increased demand forlithium-ion batteries)• After-sales service market based on long trackO

record of deliveries• Advances in waste plastic recycling, emergenceof biodegradable plastics• Increasing full-scale investment in 5G/6G
Opportunities infrastructure• Expanding consumption particularly in emerging
economies

T
Threats• Shrinking demand for plastic due to shift awayfrom plastic• Shrinking demand for separator film due tospreading use of new types of storage batteries
such as solid-state batteries

Sources of Our Strength
The equipment handled by the Plastic Machinery Business
Division has been richly infused with the core competence
we have accumulated over many years. On their own, eachpiece of equipment exhibits excellent performance, but
combining the multiple machines and equipment we havecommercialized into a full production line leads to even higher
performance and efficiency. In addition, the connection weshare with customers who are industry leaders gives us ahead start in grasping the need to respond to developments

20 JSW Integrated Report 2022

such as the emergence of alternative materials and recycling,enabling us to quickly engage in the development of such.
Furthermore, with three technical centers around the world
as bases, our division is staffed by highly experienced experts
who respond to the various types of demand for plastics,
which leads to improved equipment performance and thecreation of new technologies and equipment.

TopicsEstablishment of the Recycling Technical Center (RTC) to work on
chemical recycling with twin-screw extruders

In November 2022, we opened the RTC in our Hiroshima
Plant.
We established a chemical recycling technologythat employs twin-screw extruders to transform waste
plastics, which would have otherwise been disposedof, converted into fuel, or recycled as materials, into
chemical raw materials using the kind of depolymerization
technology most represented by thermal decomposition.
The Recycling Technical Center is positioned as ademonstration facility for the proof of concept.
We are confident that this facility will be able tocontribute to the realization of a plastic-resource-recycling
society, a goal we have set forth as a Materiality.

JSW Integrated Report 2022 21Strategy by Business

Injection Molding Machinery BusinessBusiness Overview
At the Injection Molding Machinery Business Division, we
manufacture, sell, and provide maintenance services for equipment
such as plastic injection molding machines, magnesium injection
molding machines, and blow molding machines by combining thethree main capabilities—product (improvement), sales (proposal)and service (response) capabilities—to impress our customers.
Our plastic injection molding machines are electrically poweredwith excellent environmental performance and a wide range ofmachine sizes from 30 to 3,000 tons of clamping force.
Our extensive lineup of vertical injection molding machines andspecial molding machines accommodate most of the injection
molding processing fields and are capable of meeting a variety ofOperating Environment
customer needs, which is our strength. Just as our medium andlarge machines are highly acclaimed, we are channeling efforts
into providing small and ultra-large injection molding machines thatwill also successfully win acclaim. In addition, we are also working
toward meeting demand for larger parts made of magnesium alloy,
which are garnering attention for their contributions to making for
EVs that are lighter.
We boast the No. 1 spot in term of shipment amount of plastic
injection molding machines in Japan and the third largest market
share in terms of number of units. We are the top manufacturer
with magnesium injection molding machines that are one of kindand blow molding machines that maintain an over 80% share of thedirect blow molding machine market in Japan.

Top Commitment

Message from the Head of the Division
In the march toward realizing our Purpose, we are prioritizing engagement in the Materiality of “realization of a plastic-resourcerecyclingsociety” and “contribution to a low-carbon society.” While we already provide electric injection molding machines
withlow power consumption and injection molding machines compatible with recycled and biodegradable plastics, we are
expandingthe scope of our contributions. In addition, by stepping up our global reach, we will make the world sustainableandprosperous. In fiscal 2021, we made efforts toward boosting small machine production capacity in Japan and China and
expanded
our inventory to shorten supply times. As for ultra-large machines, we expanded our product lineup and startedsales
of new products. We successively developed and launched 1,300-ton and 3,000-ton magnesium injection moldingmachines.
In the area of technological development, we have been progressing forward by realizing Material Revolution™, ourGroup’s
Purpose, into outcomes such as a reduction in the defect rate of small optical parts through our own original process
control,development of a foam injection molding process for ultra-large machines, and development of a large magnesium
injection
molding machine for large magnesium parts. Endeavoring to provide products in line with our Purpose, we areengagedin activities with the goals of achieving the No.1 share in domestic volume and sales of over 85 billion yen by 2025,

andsales of over 100 billion yen and finding our place in the global top-five companies within the next decade.
• A full product lineup from small to ultra-large

S
Strengths

SWOT
Analysismachines, blow molding machines and special
molding machines• Extensive track record and supply capacity formedium and large machines for customers in
the automotive field• Safe and reliable customizable products andability to customize for the needs of eachcustomerW
Weaknesses• Low share in the market for small machines(precision molding field) and ultra-large machines• Delays in delivery times for sudden large orders• Increase in new capital investment with the shiftOto electric vehicles• Increased demand for energy conservation due

to soaring global energy costs• Expansion of needs for eco-friendly technologies
Opportunities (bioplastics, plastic reduction, effective use ofelectric power)T• Shrinking demand for plastics due to the shift

away from plastics• Performance improvements among Chinese

Threats

manufacturers with large production capacity

Sources of Our Strength
The Group is characterized by the way we continue to provide
safe, reliable, and highly customizable machines by continuous
improvement of the basic performance of injection molding
machines through periodic model changes (i.e., improvement
capability) and our flexibility in customizing to meet the individual
demands of customers (i.e., proposal capability). Our basic designof injection molding machines takes into account customization
as a given, which makes for a greater variety of how the injection
molding machine components–such as mold clamping units,
plasticizing units, and options–can be combined. Throughcollaboration with the Hiroshima Plant and Meiki Plant, as well aswith overseas production bases, we have realized a production
system that enables us to provide injection molding machinesthat meet the needs of our customers. An example of what thissystem has made possible is our extensive track record in andtremendous capacity to supply medium- and large-sized machines
for customers in the automotive field, a strength for which we areunrivaled. As we provide injection molding machines through an
22 JSW Integrated Report 2022

extensive sales network of 21 bases, 10 in Japan and 11 overseas,and provide after-sales service through our global service network(response capability), customers are able to use our machineswith assurance.
We wasted no time in putting into practical use thixomolding,a magnesium alloy technology introduced from the U.S., and areensuring safety and favorable environmental performance fromit as a molding process, while also achieving molded products(magnesium parts) with stable quality. We are also proactively
engaged in accommodating larger size moldings by utilizing
our expertise in large plastic injection molding machines, while
contributing to improved fuel efficiency by meeting the demand forlarger but lighter magnesium parts for EVs and other automobiles.
In addition, another strength of the Group is in having achieved
a high in-house production rate (through the vertical integration of
production processes) and enabling the supply of highly reliable
injection molding machines through close coordination between our
manufacturing processes.

Our strengths in the injection molding machine market are in thefields of home electric appliances, automobiles, and miscellaneous
goods and containers.
In the field of home appliances, as recent improvements in living
conditions in emerging countries have accelerated the popularizationof air conditioners, demand for these products is expected to triple
the current level by 2050. With air conditioner manufacturers acrossthe board actively investing in equipment to capture this market
with cutting-edge energy-saving technologies, many have adopted
our injection molding machines. Their use of our injection molding
machines with excellent environmental performance is contributing
to the production of eco-friendly products that have less impact on
the environment.
In the automotive field, due to the growing sophistication of a hostof driving support systems and subsequent increase in the amountof information provided to drivers, there is a trend toward the useof multiple and larger display panels. Magnesium alloys, which
are lightweight, high in specific strength and rigidity, and possess
superior heat dissipation, are increasingly used more as materials
for the frames and casings that hold in-vehicle panels in place.
Our magnesium injection molding machines are garnering attention
because they can produce thin-walled, dimensionally accurateparts with less environmental impact than those manufactured
through die casting methods. And there was a tremendous
response immediately following our announcement about largesize machines. Meanwhile, we are also working to optimize selling
prices in response to the labor costs and commodity prices that aresoaring on a global scale.

Global air conditioner stock, 1990-2050* Source: The Future of Cooling (IEA, May 2018)

Strategy and Measures for Growth
Continuing forward with our industry-leading medium- andlarge-size machines, we are proceeding with the medium-term
management plan JGP2025 and its aim of expanding the scaleof our business by stepping up our small and super-large-size
machine offerings. Regarding small-sized machines, in addition
to the reinforcement of production in China, we have more thandoubled our supply capacity by strengthening our inventory
systems in Japan, North America, China, and Europe to ensurea stable supply of injection molding machines on a global basis,
while partially switching to domestic production to stabilize thesupply chain.
As for our ultra-large machines, to expand the lineup of
space-saving two-platen type machines, we have launched a
3,000-ton machine, followed by a 1,800-ton machine and a
2,500-ton machine, which have been well received. In addition,
we are enhancing the options we make available by offering
customization such as foam injection molding machines.

TopicsThough the impact of the pandemic continues to impair ourview about what direction to take in terms of capital investment,
we are going forward with the assured implementation of
measures in our drive to be a top manufacturer of plastic
injection molding machines.
Our magnesium injection molding machines have been steadily
adopted in the automotive field, and we have been increasing
the size of our machines in response to market demand withthe successful release of 1,300-ton and 3,000-ton machines.
Our newly developed magnesium injection molding machine
has been preliminarily put to use at our group company, MG
Precision Co., Ltd., as equipment for verification of the proof ofconcept, and we are accommodating requests for prototyping
and contract molding of large magnesium automobile parts.
We expect to see the practical application of multiple newmagnesium automotive parts in succession.

Ultra-large magnesium injection molding machine
JLM3000-MGIIeL

We have begun sales of the JLM3000-MGIIeL (clamping force:
29,400 kN), the world’s largest magnesium injection molding machine
employing the thixomolding method. A revolutionary molding method
developed in the U.S., the thixomolding method is capable of producing
magnesium alloy parts with excellent characteristics such as specificstrength, rigidity, heat dissipation, and electromagnetic shielding,as well as easy recycling and environmental performance, with low
environmental impact. Actual instances of the practical application ofthis method are on the increase, primarily for casing components in theautomotive display panels of automobiles such as EVs.

JSW Integrated Report 2022 23Strategy by Business

Strategy by BusinessIndustrial Machinery Business

New Businesses
Top Commitment

Business Overview
With industrial machinery contributing to society as its core business, the Industry Machinery Business manufactures, sells, and provides
maintenance services for equipment related to the three fields of electronic devices, economic infrastructure, and lifestyle/culture. By
providing products such as excimer laser annealing (ELA) systems vacuum laminators, hot presses, ECR deposition systems and otherequipment for the production of semiconductors, displays, and electronic components, in the mainstay area of electronic devices,
we are contributing to the realization of a super-smart society that is expected to resolve social issues in all fields. In the economic
infrastructure field, we handle railway-related products, and in the lifestyle and culture field, we handle food extruders and starting gatesfor horse races. Our distinctive product lines provide the modal shift that contributes to the realization of a low-carbon society and toaddressing food shortages and environmental issues through meat substitutes.


The
New Business Promotion Headquarters will contribute to the realization of a low-carbon society and a super-smart societythroughthe speedy commercialization of three businesses: (1) the Photonics Business, whose core products are artificialcrystalgrowth and the processing of quartz, gallium nitride, and lithium niobate for the fields of optics, 5G/6G high-speed highcapacity
communications, and power electronics; (2) the Composite Materials Business, which includes lightweight, highstrengththermoplastic carbon fiber reinforced plastic (CFRP) products for the aviation, defense, and space industries; and (3) Metallic Materials Business, which manufactures copper alloy materials to upgrade copper foil used for connector parts.
the

Top Commitment

Message from the Head of the Division

Photonics BusinessIn order to make for a sustainable and prosperous society, a host of social issues need to be resolved. One of these isBusiness Overview

the realization of a super-smart society, the construction of which hinges on a digital infrastructure capable of processing

Crystals of artificial quartz and gallium nitride are manufactured with melting and solidifying technologies in a hightemperature, high-pressure environment using large autoclaves that utilize our manufacturing technology for large
forgings and castings, which can only be produced at Japan Steel Works M&E. Using our strengths in manufacturing
technologies for these single crystals and high-precision processing technologies such as cutting and polishing, we areengaged in the manufacture and sales of various optical application products and device materials.

largeamounts of data at high speeds but with low energy consumption. As our division’s industrial machinery in the field ofelectronic
devices is involved in the manufacture of key components of the equipment that makes up infrastructure, we seethis as an opportunity to make our contribution. In fiscal 2021, we introduced new models of vacuum laminators and ELA
systems
to the market. In fiscal 2022, we will continue to expand on our existing products and businesses, while leveraging
our core competence to expand our business through new products and new businesses.
• High market share and extensive track record as asupplier in specific fields

S
Strengths

SWOT
Analysis

Message from the Head of the Division• Technical capabilities (in our ability to develop anddesign) to realize customer needs into manufacturing
equipment, especially the precision transfer
technology and precision positioning control
technology required for electronic device
manufacturing equipment• Wealth of experience in after-sales service

W• Markets in which we have a proven track record arelimitedO

T
Threats• Exclusion from the market due to industrial promotion

policies in various countries (shrinkage of target
markets)• Price competition

Global Semiconductor Market
Logic devices

Digital infrastructure development is accelerating to accommodate a super-smart society anddriving the expansion of semiconductor demand. There is a demand for equipment that enables a more advanced manufacturing process. For example, the increasing demand for higher
resolution and lighter weight units is spreading to medium- and large-sized displays, which hasbrought about a critical need for new functions and lower manufacturing costs. In addition tothese changes in the specifications desired, for electronic devices in general demand for
manufacturing equipment is also likely to expand in step with the decentralization of manufacturingbases as a result of changes in social conditions such as economic security concerns.
Amid this situation, the Group sees price competition with its competitors as a risk. To avoid
this, we will continue to make efforts at providing high-value-added equipment by enhancing
processing capability and quality, as well as optimizing selling prices.

Under the JGP2025 plan, we will seek to expand ourmanufacturing equipment business related to electronic devices.
Regarding our current products, we will introduce new models
to the market that are compatible with flexible displays and highdensity packaging. As electronic devices are manufactured
through numerous processes, we will go beyond the current
practice of supplying individual pieces of equipment by adding
to the scope of our offerings equipment that is used in upstream
and downstream processes, thereby promoting expansion
through systemization. In moving ahead with this strategy, in fiscal
24 JSW Integrated Report 2022

High-grade single crystals are expected to be utilized in various fields inthe future in ways that leverage their optical and electrical properties. We
will continue to contribute to the cutting-edge needs of our customers withthe power of Material Revolution™ by not only improving the quality ofthe three single crystals and but also by further refining our high-precision
processing technology.

Composite Materials Business

Operating Environment

Strategy and Measures for Growth

Strategy and Measures for Realizing Profitability

The market for devices related to high-speed, high-capacity communications
is projected to grow at a rate of more than 10% annually in response toboth the growth of the 5G/6G and IoT markets and the rising demand for
power saving. Applications for gallium nitride in particular are expected
to be found in various fields, including high-brightness, high-power lasers
for energy conservation, high-speed switching devices, and high-energyefficiency power semiconductors.

Weaknesses• Growth in demand for all manner of electronic devices

related to the construction of digital infrastructure in
realizing a super-smart society• Increased demand for new equipment to accommodate thedecentralization of manufacturing sites in line with thestrengthening of the supply chain
Opportunities • Market demand for high definition and lightweightdisplays is expanding beyond smaller-type smartphones
to medium and large displays

Operating Environment

MemoryShipment Value(Trillions of yen)
100

AI, smart cities,
electric cars

75

Other

Autonomous
driving, robotics

5G infrastructure,
data centers,
high-performancecomputing, IoT

50

Smartphones

25

Business Overview
The aviation and automotive fields have been adopting CFRP to reduce CO2 emissions by improving fuelefficiency. In response, the Composite Materials Business is developing molding processing technologies
for CFRP products, obtaining material design technologies, and establishing a structure that includes
quality assurance.

Operating Environment

Strategy and Measures for Realizing Profitability

With climate change control driving the increased need for lightweightmaterials, the global thermoplastic CFRP market that was 1.4 trillion yen in2020 is expected to grow to 2.2 trillion yen in 2025 and 3.9 trillion yen* in
2035. The aircraft sector, which currently accounts for half of the market,
is also expected to grow steadily after containment of the COVID-19
pandemic.

We will expand this business with a focus on aircraft components by applying ourstandard compliance and quality management capabilities cultivated in production
activities that include the manufacture of production activities that include the
manufacture of defense equipment, and our expertise in manufacturing large
composite material products (wind turbine blades) developed in the wind
power generator business. Our aim is to make commercialization profitable
while realizing a sustainable society by offering composite-material productsthat promote weight and energy efficiency for a range of mobility categories.

Source: C arbon Fiber Composite Material (CFRP/CFRTP) Technical Application
Market Outlook 2020, Fuji Keizai Co., Ltd.

PCs

02001 2010 2020 2025 2030 (Year)
Prediction

Source: The Strategy for Semiconductors andthe Digital Industry (Summary), Ministryof Economy, Trade and Industry(June 2021)

2021 we established JSW Aktina System Co., Ltd., in Yokohama
as a measure to integrate and strengthen our manufacturing,sales, and maintenance systems in the display business, aswell as a dedicated service company in China. These havestrengthened our functions for quickly resolving customer issues.
In the area of new products and businesses, we will improve
our competitive advantage through technological innovations that
apply our core competence and promote business expansion
through M&A and other means that identify promising andgrowing markets.

Metallic Materials BusinessBusiness Overview
As communication speeds and capacities increase, there is a rising demand for titanium copper foils andother copper alloys used in various electronic devices to be thinner and more functional. In order to produce
copper alloy slabs of unprecedented cleanliness and quality, JX Nippon Mining & Metals Corporation and
JSW have jointly established Muroran Copper Alloy, Co., Ltd., and are engaged in business.

Operating Environment

Strategy and Measures for Realizing Profitability

The expansion of IoT and 5G/6G will fuel a
rapid increase in data traffic. As smartphones,
tablet devices and other telecommunication
devices evolve, expansion of the market is
expected for high-performance and highquality metal products.

Using the Group’s excellent melting and solidifying technologies to manufacture high-performance
metal products of the world's highest quality–products that are very clean and of high quality, with nodefects even when thinned to the level of copper foil–we aim to both contribute to the realization ofa super-smart society in which high-speed, high-capacity communications are indispensable, and to
make this into a profitable business.

JSW Integrated Report 2022 25

Strategy by Business

Material and Engineering BusinessBusiness Overview
Japan Steel Works M&E, Inc., which conducts the Materialand Engineering Business, was established as an operating
subsidiary in April 2020 through the merger of JSW’s Steeland Energy Products Business and wind power generator
maintenance service business with four JSW Group
companies. The Muroran Plant, where Japan Steel Works
M&E is based, has been involved in the development andmanufacture, mainly of large steel castings and forgings
for power plants, making full use of our core competence
accumulated over more than 100 years, and of pressure
vessels, various industrial machinery, thick plates, clad steel
plates and other products used in public infrastructure andvarious plants. And we will continue to provide a variety ofmaterials (M: Materials) that include not only steel but also
nonferrous metals and composite materials, and possess thereliability to meet the increasingly sophisticated and diverse
needs for materials.
In addition, we have established a one-stop service systemthrough technology (E: Engineering) that meets a wide rangeof customer needs by providing solutions that include design
and analysis, welded structure fabrication, construction
and installation, inspection, and maintenance, utilizing thetechnology and experience the Group has accumulated in the
manufacture of pressure vessels for oil refineries and their onsite installation work.

Top Commitment

Message from the Business Segment HeadWe
 offer heartfelt apologies to our customers, shareholders and other stakeholders for any inconvenience and concern
causedby the inappropriate conduct in quality inspections that occurred. Japan Steel Works was founded to providesocietywith the high-quality steel it demands. That mission remains unchanged for us. We will continue to make the worldsustainable
and prosperous by providing a stable supply of steel castings and forgings that offer world-class qualityandperformance.
 In the materials business, utilizing our technological capabilities and resources to provide new materials that addressincreasingly
complex energy issues, we will continue to contribute to the realization of a low-carbon society. Specifically, inaddition
to conventional large steel castings and forgings for thermal and nuclear power generation, we aim to demonstrateour advantageous position and expand orders for small and medium-sized steel castings and forgings such as invar
materials
for the renewable energy and IT fields, which are expected to grow in the future, by flexibly responding to high-mix

low-volume
production and short delivery times.
 And regarding the engineering service business, we will expand the scale of our business by maximizing the synergy
generatedwith the materials business by leveraging our manufacturing technologies cultivated in the material business andour relationships with stakeholders to respond to new social needs, such as those posed by Japan’s National Resilience Plan.

• Equipment and manufacturing technologies that

S

SWOT
AnalysisStrengths

enable the manufacture of large forgings andcastings• High quality and safety honed in electric power
and nuclear power products• Ability to provide one-stop engineering services• Inefficient capacity use and operations due tobuild-to-order manufacturing system (difficult tostandardize)• Since the equipment is intended for the
manufacture of large products, operations are
Weaknesses inefficient for small products and mass-produced
products

W

forging and heat treatment technologies as basic technologies
developed over many years to meet the stringent requirementsof the thermal power and nuclear power generation fields–
basic technologies that work powerfully to separate us fromthe rest.

With the launch of Japan Steel Works M&E, Inc., theservices previously offered by individual Group companies,
such as design and analysis, welded structure fabrication,
construction, inspection, and maintenance, have been
centralized to enable us to provide wide ranging engineering
services, a one-stop system to meet customer needs.

Operating Environment
Global energy demand is predicted to increase in every climatechange scenario considered by the International Energy
Agency (IEA) (see figure on the right). At the same time, thereliance on fossil fuel (coal, oil, and LNG) power generation
is projected to decrease and the reliance on renewableenergy sources such as wind power is projected to increase
sequentially, from the Stated Policies Scenarios (STEPS) to theAnnounced Pledges Scenario (APS) and Net Zero Emissions
Scenario (NZE). As for the impact on the Group’s business,
although new orders for large coal-fired thermal power plants
will decline, for the foreseeable future there will be deep-rooted
growth in gas turbine combined cycle power generation andreplacement demand for services. Amid the withdrawal ofcompetitors and industry reorganization, we anticipate that wewill be able to secure a steady level of operations and sales.
While fossil fuel power generation will decline as we approach
NZE, wind power generation and other renewables will growsignificantly, so we expect to see continued growth in thetarget markets for the Group’s products in those scenarios.

The core businesses of the engineering service business are
the installation of and repair work for manufacturing equipment
and repair work for the public infrastructure facilities. Businessis expected to continue and grow in both the private and public
sectors due to investment in the renovation and measures toextend the life of aging equipment.

Markets targeted by
M&E products

Source: Compiled by JSW using data from World Energy Outlook 2022,
International Energy Agency (IEA)

Strategy and Measures for GrowthFirst and foremost, by promptly acknowledging and rectifying
the inappropriate conduct for which we are responsible, we will
endeavor to quickly regain the trust of our customers.
On top of that, as a certain degree of demand is expected
to continue, we will place large steel castings and forgings
for power plants at the very center of our business, andstep up efforts to improve productivity and proceed withthe optimization of sales prices in order to achieve a stable
turnaround to profitability.
At the same time, regarding material products, we willchannel efforts into high-value-added functional materials
and rebuild a sound product portfolio by applying the special
melting, forging, heat treatment, and other differentiating
technologies that we have developed over many years.

Regarding the engineering service business, we will develop
this segment into a stable core business by providing
comprehensive one-stop engineering services for the entire
value chain, from sales of hydrogen-related products andwelded structure to plant construction and maintenance, in
response to the social need for carbon neutrality and demand
related to Japan’s National Resilience Plan. On the other hand,though the environment for orders continues to be toughamid intense competition, for clad products we will focus on
strengthening the unit’s revenue foundation by shifting to a
production system that is resilient to operational change, while
establishing a unique position within the market with a broad
product lineup.

• Adaptation to the hydrogen economy and naturalO

energy sources to become carbon neutral• W ithdrawal of competitors and industry

T

restructuring trends• Focus on infrastructure projects such as those in
Opportunities Japan’s National Resilience Plan

• Decline in coal, oil and LNG power generationand oil and gas industries due to adaptation to acarbon-neutral society

Threats

Sources of Our Strength
The Muroran Plant has the facilities and technology to
manufacture 670 tons of steel ingot, among the largest
capacities in the world. Steel ingots manufactured to matchthe size of the end product are forged and heat treated on alarge 14,000-ton press, and finished into their final shape withultra-large machine tools that have a maximum processing
weight of 400 tons.
In the clad products field, we can produce not only general
stainless clad steel plates but also special clad steel plates
such as nonferrous metal clad steel plates and double-sided
26 JSW Integrated Report 2022

clad steel plates, and we are one of the few companies
capable of handling integrated manufacturing from the
manufacture of steel plates to pipe-making. In fiscal 2020, ourrolling mill for wide and thick steel plates was converted toelectric power and heating furnace facilities were updated torealize a reduction in CO2 emissions and improve productivity.
The steel castings and forgings and clad steel products
made with this equipment are used in public infrastructure
and various manufacturing plants. We can single out special
melting technology for extra-large castings and forgings andTopicsContributing to the spread of offshore wind power generation:
Super large anvils for monopile pile driving machines

When a pile-driving machine is used to drive the columns (monopiles) that secure offshore windturbines to the seabed, a lid-like component called an anvil is fitted over the monopile, which isthen struck with a hammer (ram weight). In recent years, generators have been rapidly increasing incapacity as wind turbines accordingly become larger. The monopiles that support wind turbines arealso becoming larger in diameter, and the Group's large anvils, with external diameters of 6.5 meters
or more, account for 100% of the world market share. And anvils with an external diameter of 8
meters, a size not found elsewhere around the world, have already been put to practical use.
As indicated in the demand forecast above (see above chart), in all scenarios envisioned between
the present and 2050, offshore wind power generation is expected to grow significantly, and weanticipate strong demand for our Group’s products. We will contribute to society with the power ofMaterial Revolution™ by creating completely new products and services through the qualities that
set us apart from the rest–qualities that we have cultivated over the years.

JSW Integrated Report 2022 27

Financial and Capital Strategy: Message from the CFO
We will increase our corporate
value by upgrading our businessportfolio management andactively investing in growth while
ensuring financial soundness.

Hiroki Kikuchi
Director & Managing Executive Officer
CFO; in charge of Plastic Machinery Business Division, Injection
Molding Machinery Business Division, and Ordnance Business
Headquarters; in charge of Finance & Accounting Department
and General Manager of Corporate Planning Office

Net sales in fiscal 2021, the first year of the JGP2025 mediumterm management plan, increased 8.0% year-on-year to¥213.7 billion, mainly due to increased sales of injection
molding machinery in the Industrial Machinery Products
Business Segment and steel castings and forgings in the
Material and Engineering Business Segment. Operating income
increased 51.2% year-on-year to ¥15.4 billion, mainly due toa ¥7.7 billion increase in production, sales, and selling prices,
and a ¥4.8 billion reversal of the operating expenses recordedin the same period of the previous year that accompanied achange in the calculation method of retirement benefit liabilityof Japan Steel Works M&E, Inc., and a loss on valuation of
inventory assets. Variable expenses increased ¥6.8 billion
due to the soaring prices of semiconductors, metal materials,
transportation, energy, and other items. In order to cope withthis rapidly changing business environment, we recognize that
we have the urgent need to enhance profitability through the
optimization of selling prices.
Orders received were ¥268.3 billion, up 48.2% fromthe same period last year, due to growth in separator film
manufacturing equipment in the Industrial Machinery Products
Business Segment driven by accelerated EV production.
Another driver was robust growth in both plastic andmagnesium molding machines and in steel castings andforgings in the Material and Engineering Business Segment.
We expect net sales in fiscal 2022 to reach a record highdue to strong performance in orders received. And against
a backdrop of steady demand for EV-related products
principally, orders received in the Industrial Machinery
Products Business Segment have generally increased
in fiscal 2022. The measures taken under JGP2025 areprogressing favorably across the board, well toward achieving
the numerical targets for the final year of this medium-term
management plan.

Basic Financial Policy and Financial KPIs
JSW Group’s basic financial policy is “based on thepremise of ensuring sound finances, to proactively invest forsustainable growth to realize the enhancement of corporate
value.” We have positioned net sales, operating income andROE as KPIs, and set as quantitative targets for fiscal 2025
net sales of ¥270 billion, operating income of ¥27 billion, andROE of 10%.
While aiming to secure the minimum 8% ROE, which is
expected by institutional investors, we plan to increase theequity spread by further improving profitability, and raise theROE to 10% by the final year of JGP2025. As our level offinancial leverage poses no problem to the financial soundnessof the company, improvement of our net profit margin andtotal asset turnover ratio will be an important task that we willachieve through the managing of our business portfolio.
To ensure our financial soundness, we will set an equity
ratio target of 40% or more, and thereby maintain our current
creditor rating (R&I) of A or higher. Cash and deposits (¥106.2

28 JSW Integrated Report 2022

billion as of the end of fiscal 2022) will be maintained at the
optimal level of ¥55 billion, the equivalent of two months ofmonthly sales with funds for unexpected risks factored in, as
we pursue proactive investing.

Cash Flow Allocation
The cash flow allocation set by JGP2025 includes ¥105 billion
for growth investment (which represents the total of capital
investment, R&D investment, and M&A investment), resulting
in a cash outflow of ¥140 billion. At the same time, cash inflow
is expected to come out to about ¥30 billion due to ¥110
billion in income from business activities and asset utilizationthat includes the sale of cross-held shares and the use of
cash and cash equivalents. We also plan to reduce our crossheld shares to less than 10% of net assets.
Regarding capital investment, the plan is to makeaggressive investments for sustainable growth. This could go
beyond that which was initially planned due to our responseto the increasing demand for separators and other plastics
machinery, and our increasingly aggressive investment indigital transformation. In addition, should there be promising
M&A opportunities that could create greater value forshareholders, we are ready to flexibly take action with cashon hand and debt, even if the scope exceeds the planned
amount of ¥30 billion.
Income from Business Activities¥110 billion

Capital Investment¥45 billion

R&D Investment¥30 billion

Utilization of
Low-Profit Assets¥30 billion

Additional investment
Shareholder Interest-Bearing
M&A Investment (cash on hand and debt)
Returns Debt Repayment
in promising M&A¥30 billion¥20 billion ¥15 billion
opportunities

Cost of Capital and Business Portfolio Management
The Board of Directors deliberated and decided on a basic
policy in fiscal 2021 to upgrade our business portfolio
management. Specifically, there was the creation of a fourquadrant framework based on the two axes of ROIC andsales growth rates for each business. Once analysis andbusiness assessment were carried out to ascertain the current
situation, there were discussions and deliberations about
the ideal business portfolio to be achieved in 10 years' time,taking into consideration the marketability and competitive
advantage of each business.
Based on the business portfolio analysis, we will further
bolster our competitiveness by aggressively investing
resources in plastic production and processing machineryand injection molding machinery, which are positioned
in the upper-right quadrant of “high-priority investment
businesses” in the four-quadrant framework. We will promotecomplexification (i.e., enlargement of the business domain
through M&A Segment) in the Plastic Processing Machinery
Business to expand our product lineup.
In addition, based on the forecasted expansion of eachbusiness, we will aggressively invest resources in order todevelop into core businesses industrial machinery in thefield of electronic devices and the crystal business, which
has launched the operation of a large-scale demonstration
facility for the mass production of gallium nitride substrates.
Furthermore, we will also step up research and development
toward the creation of new businesses.
And based on our recognition of the importance ofcontinuing to create shareholder value through appropriate
resource allocation, we have established criteria for exiting
businesses and, in April 2022, began applying investment
adoption criteria for the verification of each investment projectthrough use of the NPV method.** NPV (Net Present Value) method: An indicator for showing how much value
can be derived from a given investment.

Four-Quadrant Framework(WACC)High

Sales Growth Rate

Perception of the Business Environment

B

Businesses with
Growth Potential

High-Priority

S Investment Businesses

GDP Growth Rate(global)C

Business toUndergo Profit
Structure Reform

A

Businesses to Consider
Renewed Growth

Low
Low

Return on Invested Capital (ROIC)High

Shareholder Return Policy
Our basic policy regarding the return of profits to shareholders
is to pay stable and continuous dividends and to improve thedividend payout ratio. In addition, in order to increase both
0 corporate value and shareholder value, we will continue toensure the stable profitability of our current businesses while
promoting capital investment and R&D investment for thegrowth of new businesses and products, while also striving to
improve the financial basics of the company.
As we aim for a consolidated payout ratio of 30% or more
and to pay consolidated dividends based on a dividendon equity (DOE) ratio of 2% or higher, we plan to pay total
dividends of ¥20 billion during the period of the JGP2025 plan.
Since DOE is derived by multiplying the dividend payout ratio
by ROE, we assume that if ROE exceeds 6.7%, the dividend
payout ratio of performance-linked dividends will be 30% ormore. We always aim to achieve a ROE of 8% or higher andadopt a paying policy of performance-linked dividends. As
we increase the transparency of dividend decisions in thismanner, a review of shareholder return criteria led to a yearon-year ¥22 increase in the annual dividend per share to ¥57
in fiscal 2021, and the dividend planned for fiscal 2022 is ¥58.
Over the medium to long term, we will continue to strive
for sustainable corporate value improvement by heightening
asset efficiency, optimizing cash allocation, and upgrading ourbusiness portfolio, which is undergirded by a strong
financial foundation.

JSW Integrated Report 2022 29