Materials that spread joy
To everything that makes us smile
To industries that enrich our lives
To a future that is kind to us and to our planet
You may not know it, but we’ve already met

INTRODUCTION

2Tokai Carbon is Helping out behind the Scenes

4

Tokai Carbon’s Seven Businesses

6

At a Glance

Tokai Carbon Value Creation

8

Message from the President

14

History of Tokai Carbon Value Creation

16

Tokai Carbon’s Value Creation Model

182020 Performance Data

Strategy for Value Creation20	2020 Highlights
22

Solid SiC Products to Support the Evolution of Semiconductors

Business Overview

Graphite Electrodes24		Carbon Black26		

Fine Carbon

28		

Smelting and Lining

30		

Industrial Furnaces and Related Products

31		

Other Businesses (Friction Materials, Anode Materials)

Foundation that Supports Corporate Value

32

ESG Management

34

Environmental Management

36

Respect for Human Rights

37

Human Resources Development38

Occupational Safety and Health

39

Reliable Product Supply / CSR Procurement40

Corporate Governance

Financial Section & Corporate Data

46

Financial Strategy

48

Long-Term Earnings Summary (2010–2020)

50

Financial Statements

57

Company Overview

58

Group Companies

60

Stock Information

The Tokai Carbon Group pursues medium- to long-term business strategies to realize its long-term vision of being “A GlobalCarbon Company Contributing to a Better Society.” This Integrated Report presents our business results and outlook, andoverviews of individual businesses, from both financial and non-financial perspectives.
Our website presents the latest information and details on our businesses and on environmental and social matters. We invite
you to visit it to learn more about Tokai Carbon.
WEB https://www.tokaicarbon.co.jp/en/
Issue Date August 2021
Reporting Scope	This report applies to Tokai Carbon Co., Ltd. and affiliated companies. The scope of applicability for reports with alimited reporting scope shall be indicated separately.
Reporting Period Excluding content with specific dates, this report reflects activities between January 1, 2020 and December 31, 2020.

TOKAI CARBON INTEGRATED REPORT 2020

1

Tokai Carbon is Helping out
behind the Scenes

1
Steel frames of buildings
and bridges
Most steel beams are recycled in electric arc
furnaces using graphite electrodes.
Graphite Electrodes

2Black ink
Carbon black is used pigment ink fordaily newspapers and coloring plastics.
Carbon Black

3
Aviation engine parts
Fine carbon products are used in themanufacturing process of engine parts.
Fine Carbon

2TOKAI CARBON INTEGRATED REPORT 2020

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Foundation that Supports Corporate Value

Financial Section & Corporate Data

4
Building glass
The surface is processed in industrial furnaces using
EREMA heating elements.
Industrial Furnaces and Related Products

5
Brakes/Clutches
Our components are widely used in motorcycles,
agricultural machinery, construction equipment,
and industrial robots.
Friction Materials

6Electric vehicle battery
We are helping to boost lithium-ion battery
performance to popularize electric vehicles.
Anode Materials

7Vehicles and wheels
We support the growing demand of aluminumfor lighter weight products by providing cathodes
for its smelter.
Smelting and Lining

TOKAI CARBON INTEGRATED REPORT 20203

Tokai Carbon’s Seven Businesses
Tokai Carbon operates a portfolio of seven businesses lead by the two core businesses ofgraphite electrodes and carbon black.

1 Graphite Electrodes

Graphite electrodes are indispensable to the process of melting
scrap steel in an electric arc furnace and recycling it into steel
beams and other products. The graphite electrodes work aselectrical conductors in such furnaces. We supply high-quality
electrodes to the electric arc furnace, which has significantly
lower CO2 emissions compared to the blast furnace steel
making method. Tokai Carbon is helping to curb climatechange and recycle resources behind the scenes.
Electric arc furnaces emit 1/4 the CO2 compared toblast furnaces
P.22

2 Carbon Black

Carbon black is used as a reinforcing agent to enhance
the strength and extend the life of tires. It is made fromresidual oil and accounts for nearly 30% of the weight oftires. It is also widely used in black pigment inks, in resins,
and as a wire coating material.
When you see black items, it’s carbon black.
P.24

3 Fine Carbon

With its superior heat resistance and electrical conductivity
characteristics, fine carbon is used in a wide range ofindustries including semiconductors, smartphones andsatellites. Tokai Carbon Group’s lineup features a wide
range of world class products, including glassy carbon andsolid SiC products, which we pioneered.
From semiconductors to solar panels for satellites
P.264TOKAI CARBON INTEGRATED REPORT 2020

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Foundation that Supports Corporate Value

Financial Section & Corporate DataFurnaces
4 Industrialand Related ProductsThis business supplies custom-made furnaces for heating
ceramics, glass, metals, powders, secondary battery materials,
and electronic components. We also develop and manufacture
the heating elements (EREMA brand) to take care of the overall
technology and development needs of industrial furnaces.
Responsible for heat treatment processes
in a wide range of industries
P.30

5 Friction Materials

Friction materials play an important role in brake/
clutch mechanisms that support power control in various
applications such as motorcycles, agricultural and construction
machinery, industrial robots, and wind power systems. Our
highly regarded material design technology is based on ourthorough knowledge of carbon (the products’ raw material).
Contributing to every field from agriculture andconstruction to industrial robots
P.31

6 Anode Materials

Lithium-ion batteries for electric vehicles require the highest
performance in quality and safety. The carbon anode material
we produce determines the performance of the lithium-ionbatteries. We contribute to batteries that are compact in size,
large in capacity, and longer in service life.
Impacting the driving performance of electric vehicles
P.31

7 Smelting and Lining

We are a top-tier supplier of cathodes used in aluminum smelters,
furnace linings for blast furnaces, and carbon electrodes used insmelting silicon metal and other metals. Our high-quality cathodeblocks support the rising demand for aluminum for lighter
weight applications.
Supporting demand for aluminum forlighter weight applications
P.28
TOKAI CARBON INTEGRATED REPORT 2020

5At a Glance
Sales by Division

Global Business Organization(FY2020)

JapanFriction Materials

9 companies
22 locations

Anode Materials

3.2% 2.1%

Industrial Furnaces
and Related Products

6.9%

GraphiteElectrodes
Smelting andLining

18.8%

18.1%

Fine Carbon

15.8%

FY2020Carbon BlackEurope

6 companies
8 locations

35.1%¥201.5 billion

Building a balanced
business portfolio
The Group has long relied on two businesses, Graphite Electrodes
and Carbon Black. Seeking a more stable earnings structure,Asia

8 companies
8 locations

Sales by Region (FY2020)
Other Regions

10.6%

Europe11.7%

we expanded our Fine Carbon business, which supplies thefast-growing semiconductor industry. Meanwhile, the Group has also
set its sights on the aluminum market, which is projected to overtake
the growth of the steel market, and acquired its smelting and lining
business through M&A in 2019. As a result, our revenue streams are
now diversified. Our three-year medium-term management plan
“T-2023” targeting 2023 aims to strengthen the revenue base ofeach business and further optimize our business portfolio.

6TOKAI CARBON INTEGRATED REPORT 2020

United Statesof America

26.5%

Asia

26.7%

Japan

24.6%

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Foundation that Supports Corporate Value

Financial Section & Corporate Data

Sales by Division (Target)
Friction Materials Anode Materials

2.7% 1.8%

Industrial Furnaces
and Related Products

6.2%

GraphiteElectrodes

25.8%

Smelting andLining
North America

6 companies
6 locations

Workforce Structure by Region

19.1%

Fine Carbon

13.1%

FY2023 Target

Carbon Black

31.4%¥320.0 billion(FY2020)Asia

21%JapanEuropeNorthAmerica

32.5%

31%

15.4%

TOKAI CARBON INTEGRATED REPORT 20207